EDITOR NOTE: By now, it should be clear to you how the strength of the financial economy is being driven by all of the newly-created money pumped into the system. The charts below show the 71% increase in the US M1 money supply and its correlation to the markets in just 2020 alone. What’s not yet clear is the significant impact this will have when it comes to eroding your purchasing power. This is because people have been stashing rather than spending this money. Once the velocity of money picks up, we may end up seeing a hyperinflationary environment. What you’re seeing here is a deliberate wealth transfer: the Fed is stealing the value of your cash in order to benefit the Americans who derive most of their wealth from the stock market and real estate. If you don’t own a large portfolio of stocks, or if you don’t own properties--in short, if all you have is cash saved in a bank account, then you’re more or less screwed, for its values are about to depreciate very quickly. This is why we invest in non-CUSIP gold and silver. Their valuations will rise as the value of your hard-earned cash gets transferred to the pockets of the elite and ultra-wealthy.
— Sven Henrich (@NorthmanTrader) February 24, 2021
Originally posted on Northman Trader/Twitter