Thursday , 22 October 2020


Tag Archives: U.S. monetary base

Global Liquidity Supports a Gold Price of $1,780/ozt.

There is a remarkable correlation between the prevailing level of global liquidity (defined as the sum of the U.S. monetary base and the foreign holdings of U.S. Treasuries) and the price of gold per troy ounce. The current correlation suggests a gold price of $1,780 as illustrated by the chart below.

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QE Could Drive S&P 500 UP 25% in 2013 & UP Another 28% in 2014 – Here’s Why

Ever since the Dow broke the 14,000 mark and the S&P broke the 1,500 mark, even in the face of a shrinking GDP print, a lot of investors and commentators have been anxious. Some are proclaiming a rocket ride to the moon as bond money now rotates into stocks....[while] others are ringing the warning bell that this may be the beginning of the end, and a correction is likely coming. I find it a bit surprising, however, that no one is talking of the single largest driver for stocks in the past 4 years - massive monetary base expansion by the Fed. (This article does just that and concludes that the S&P 500 could well see a year end number of 1872 (+25%) and, realistically, another 28% increase in 2014 to 2387 which would represent a 60% increase from today's level.) Words: 600; Charts: 3

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