"In short, I can’t say exactly what has driven this ratio to the highest level in some 5,120 years, but it does prove one thing beyond a doubt: the financial markets are in an extraordinary, unprecedented situation.
One view of the ratio, by Wheaton Precious Metals1, is that the ratio is “an indicator of the global monetary condition.” According to their analysis, “during periods of inflationary monetary proliferation, the ratio falls. During eras of deflationary monetary destruction, the ratio rises. To put it plainly, these highs are alerting us to a pervasive capital shortage.” That agrees with what I found, that the ratio tends to rise when inflation expectations fall. It would also explain why this historical high coincides with the most powerful coordinated central bank injection of funds since the Global Financial Crisis, and indeed perhaps ever.It would also go along with the widening currency basis and the Fed’s move to make currency swaps more available. Perhaps the 5,000-year high in this indicator is warning us of a tremendous deflationary period ahead." https://www.nasdaq.c...ears-2020-03-17
5 trillion dollars sounds like quite the shortage to me....
can i get some shortage please?