Money Debasement

Equity Markets Show Strong Performance Despite Global Challenges

Over the last 25 years, the S&P 500 has achieved remarkable success, as shown in a recent analysis of rolling returns. Despite concerns about economic challenges such as inflation, recessions, and global uncertainties, the equity market in the US has continued to grow. The year 2024 marks one of the most successful periods for equities in the past two and a half decades.

A Record-Setting 25 Years for Equities

The performance of the S&P 500 over the last 25 years has been impressive, reaching new heights. This long-term growth reflects the strength and resilience of the US equity market, even during times of economic uncertainty. The blue line on the chart shows how 2024 stands out as one of the best-performing years in this 25-year stretch, indicating that equities have done exceptionally well.

Growth Despite Economic Worries

Although the world has faced many challenges, including inflation, recession fears, and geopolitical conflicts, equity markets have continued to rise. Investors may have been worried about these issues, but the data shows that the stock market has remained strong. This growth is not just a short-term trend but part of a broader, long-term increase in the value of equities.

Currency and Asset Growth

One of the reasons for the rise in equity prices, as well as other asset classes like real estate and gold, is the increase in the money supply. When central banks print large amounts of money, the value of currency tends to decrease. As the value of money goes down, the prices of assets like stocks, real estate, and gold tend to go up. This is one of the key factors driving the recent growth in equity markets.

The Impact of Currency Debasement

Currency debasement occurs when the value of money declines due to excessive money printing. This can lead to inflation, but it also causes assets to increase in value. This is why, despite some economic challenges, we see growth across various asset classes. Equities, real estate, and gold are all rising because the value of money is falling. This dynamic has played a significant role in the performance of the S&P 500.

A Broad Increase Across Asset Classes

It’s not just equities that have seen a rise in value. Real estate and gold have also experienced significant growth during this period. This is largely due to the weakening of currencies. As more money is printed, the relative value of hard assets increases, leading to higher prices for stocks, property, and precious metals.

Watch the Video Here