As sung by the iconic ABBA “Money money money, must be funny, in a rich man’s world” let’s look at but a few measurements of which there are infinite permutations, of “money”.

Obviously a mere glance at the above Gold Scoreboard’s right hand panel shows us measures of two monies we regularly follow, i.e. the U.S. Dollar money supply (M2) and the price of Gold, which until some seven years ago ceased naturally moving up in positive correlation with M2 since the turn of the millennium. To be sure, prior to 2001, Gold lagged increases in the Dollar’s supply, albeit far less demand was there for the yellow metal as the average Joe could be content with a CD rolling over each year at the bank.

But as with anything, the more of whatever there is, the less it is worth per unit, as we’ve so strikingly seen since 2001 with more and more dollars and thus less and less rate of interest. Arguably too, one might command higher interest rates as with more Dollars, there’s more risk as they become more worthless. Still, rates rising year-to-date are making the Dollar look great, its Index is up +3.9% in 2018, (and its M2 supply actually +3.2%, but we’re not supposed to mention that), while Gold is -8.2% (and don’t look if you’ve a weak stomach, Silver is -17.1%).

Dollar strength, indeed. And why not? As well year-to-date, the Turkish Lira has fallen against the Dollar from 26¢ to 16¢ (-38% or from 4/$ to 6/$); the Argentine Peso has fallen against the Dollar from 5.2¢ to 2.7¢ (-48% or from 19/$ to 37/$); oh and lest we forget, the Venezuelan Bolívar has fallen against the Dollar from 9.7¢ to 0.0004¢ (-99% or from 10/$ to 250,000/$).

“But, the combined GDPs of those countries is less than that for Texas, let alone California…”

Now don’t wreck all that “Dollar strength” fun going on out there. Clearly, the Doggie Dollar is getting the bid (rather than is Gold) as there is a modicum from an interest rate to be gained and little panic about it all.

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