Here is why the lower and middle classes struggle to achieve considerable wealth over a lifetime.
Chart 1 – The US M2 money supply growth has been incredible over time. The greater the supply of money there is, the less the purchasing power of that money. This chart shows the folks with the most wealth do better than those with less, or, in other words, the folks who are closer to the creation of the money are better informed on how to maintain their wealth while the money itself suffers diminishing returns. Simply put, it’s the informed vs. the uniformed, and the informed are winning! (Click on image to enlarge
Chart 2 – Here is why the money supply must maintain its rapid growth rate. Money must be created to allow the exploding US federal debt to be absorbed by investors. When the US federal debt could not be absorbed by investors, the Federal Reserve bank purchased the excess (or money printing, BRRRR!).
Chart 3 – Here is how the informed defend their purchasing power against the exploding creation of money supply (and Federal debt). The informed invest in gold and the stock market. Investing property has not held up well, hence why the uniformed do poorly vs the informed.
Chart 4 – Of course the sophisticated informed investor selects the better-performing asset classes like technology stocks (!COMPQ). Of course, the best-performing asset classes since 2011 have been Bitcoin and Ethereum, but as we know these assets swing up and down with massive volatility.
It’s hard to think that those who create the massive new money supply are not informing those who know how to generate wealth from it. After all, the US election cycle depends on a massive injection of newly created money. More By This Author:Bitcoin 2025 Price Targets
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