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Commodity Returns and Broad Money Expansion.

In Investment Returns on April 25, 2011 by CQCA

The above chart shows the price increase of selected commodities if they were adjusted to the M3 money supply. The broad money measure (M3) expanded 192% over the period. Even though these commodities outpaced the CPI and M2, they did not keep up with the broad money measure. In a hyper-inflationary environment, like the 1970s, even an increase of 188.24% (for Talc and Pyrophylite) in price still did not allow an investor to see real gains in wealth.

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