Skip to content

2020 in Review – Silver Beats all Stocks (and Other Metals) While “Asset Price Inflation” Soars into Double-Digits

Posted by 1st American Reserve on

The year just completed, 2020, was a year in which most markets rose by double digits, fueled by an unprecedented infusion of cash from the Federal Reserve and the U.S. Treasury. The Federal Reserve added over $3 trillion to its balance sheet in under four months, from mid-March to June 30, increasing liquidity to the investment community through bond purchases, while the U.S. Treasury added a similar amount in stimulus packages to the American people. Since many businesses were closed and travel was restricted, most Americans did not spend this money on goods and services, or on travel and leisure, but on investments. As a result, Bitcoin soared, as did global stock markets, residential real estate and other investments.

 

In most years, either stocks OR precious metals rise, not both, but in 2020, both rose by double digits:

 

Other examples in major markets would include residential real estate and global stocks. In the last year, the Case-Shiller home price index rose 8.4%, its greatest rise in 14 years. In the last four months, its pace of increase doubled, to a 16.3% annual rate. Another example is the Japanese stock market, which has been depressed for decades, due to its high debt, a weak economy and a shrinking, aging population. Japan has the highest debt-to-GDP ratio (236%) of any nation on earth. Despite all these negative fundamentals, the Nikkei 225 Japanese stock market index has skyrocketed 20% in the last two months, in a buying frenzy.

Now, with new stimulus checks being sent out last week, we will see more money in the hands of American investors over the next week. The new Biden administration should be putting more money in the hands of Americans over the next two years. This is “Modern Monetary Theory” in action, which says “deficits don’t matter.” Pundits claim that there is no inflation, but “asset price inflation” is all around us!

Trackbacks

No Trackbacks

Comments

Display comments as Linear | Threaded

No comments

Add Comment

Enclosing asterisks marks text as bold (*word*), underscore are made via _word_.
Standard emoticons like :-) and ;-) are converted to images.
E-Mail addresses will not be displayed and will only be used for E-Mail notifications.
To leave a comment you must approve it via e-mail, which will be sent to your address after submission.

To prevent automated Bots from commentspamming, please enter the string you see in the image below in the appropriate input box. Your comment will only be submitted if the strings match. Please ensure that your browser supports and accepts cookies, or your comment cannot be verified correctly.
CAPTCHA

Form options