| | | its the sort of article you see often... that isn't 'wrong' but still ends in a cul de sac disconnecting the meaning from the data...
The charts show the debt has doubled since 2012... and show the slope of the rates in increase are meaningful in being "unconstrained" and "uncorrected" since 2020.
So, the proper bit of relevance is in the impact on inflation... and metrics that you might expect to be tied to it.
So, I took their chart and gave it some context... not by plotting it against a fictionalized inflation chart... but by plotting it against the (inverse relationship) chart of the price of gold in ounces of silver... the gold silver ratio.
The thick blue line is the base price of gold in silver with silver at a high... so ~60 or 65 ounces of silver to buy an ounce of gold. Deviations above that, as in 2020 with a peak at 125... might be seen as the market impact of silver price suppression. What's useful there... is the correlation in timing more than in price...
The "long term" chart of gold... "should" have a strong correlation between gold prices defined in a currency like the dollar... and the relative debasement of that currency... or the rate of inflation.
I just saw a report on CNBC noting companies have raised prices on average between 10 and 13% so far this year... or, annualized... as earnings are being reported, with companies reporting earnings growth of around 2 to 3%... even with lower sales... because of higher prices. The word is "the consumer continues to spend"... but, of course... rising rates mean we're "just entering" recession about now... so, we're closer to a peak in (earnings and) consumers ability to sustain spending heading into a decline... rather than in good position to see growth being sustained...
The same bit had Rick Santelli come on to talk about the VIX... and report that M2 has never been lower... giving little reason to expect stocks should move higher as the latest round in Fed driven P&D is over now... while also using that (Fed sucking all the money our of the economy) to predict... without evidence or reason... that necessarily means "inflation is under control"...
How a long term destruction of supply capacity... leads to falling prices... they haven't tried to answer.
Real inflation is over 10%... and showing nothing occurring that appears likely to change that... even with a recession occurring... the key impact of which will be preventing any investment in production of "more" and larger in the supply of goods... so that prices can't come down, and have no domestic market driver forcing them lower...
The massive inflection on the chart in 2020... took silver from a manipulated low at 125... back down to ~60 or 65.. as the debt exploded higher.
The trade this chart shows was "buy silver" at the peaks in the ratio... so, in early 2020 buy silver when it took 125 ounces to buy an ounce of gold... and, then, in early 2021... convert the silver to gold at a ratio of 65 ounces of silver to one ounce of gold... so, doubling your gold holdings relative to buy and hold gold... buying silver when it was apparent that the price was being suppressed in anticipation of a looming flood of debt hitting the market.
Another way to consider this, of course, is that what the chart shows is a step-wise currency devaluation occurring relative to gold and silver...
Additional analysis might be useful... comparing the slopes of the gold lines drawn tracking the relative decline of silver vs gold over roughly 3 year long trading trends... and what that means re structure in the trade then... and timing trades... now... if you can triangulate a relational trend vs "the drivers"...
What you can't get from this chart is "are gold and silver keeping up with inflation"... since the basis of the chart relative to the dollar is an ounce of gold... which is not priced in dollars on this chart...
But, neither gold nor silver have clearly "broken out" of prior dollar price defined trading ranges, yet... leaving a massive and unresolved disconnect between market prices of the metals in dollars... and the declining value of dollars and the declining economic value in the dollar based economy as that is suppressed as much or more than the price of metals, currently...
But, also... you can't determine from this... what the price of gold in silver in dollars... and not the ratio charted here... "should be"... given the known in silver at current market prices with big cost of production increases... not being worth mining... with non-monetary limits on supply growing too, as Mexico's geopolitical risks grow and large producer Mexico begins constricting mining... All that at the same time that "strategic reserves" of silver stockpiled in the market have essentially evaporated while industrial demand is growing faster than supply... another instance showing how economic policy changes that work to throttle production and delay or prevent new supply coming to market... drives cost inflation...
As policy increasingly throttles production... and inhibits imports... inflation will accelerate... not decline.
How that plays out in specific instances, as... "they" try to force you to drive an EV... without generating new supplies of electricity to enable that... ? They're already saying, in California... that you'll have to have an EV to be allowed to drive... but then... you won't be allowed to drive it anyway. Policy is so disconnected from economic reality, already, that "economic collapse" is made the inevitable consequence. So, even as costs sustain inflationary increases due to money supply growth... they also sustain policy inhibitions that work to forcibly "shrink the economy" in parallel with rising prices... ensuring prices rise even more... as massive deflationary impacts are imposed that shrink the economy (with "tipping point" issues in accelerations into a deflationary spiral looming) still without driving prices lower...
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