Commodity Returns and M2 Expansion.

In Investment Returns on April 24, 2011 by CQCA

The previous article showed the negative real returns of commodities when adjusted to the CPI. However, the increase in the CPI did not fully reflect the increase in the M2 money supply. The chart above shows the investment return on commodities if they were adjusted for the increase in the money supply.

The price of titanium slag increased 147.19%, but the M2 money supply increased 149.83% over the decade. This means that an investor in titanium slag actually lost about 2% of real wealth.

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