We have seen comparisons of the price of gold to the adjusted monetary base and to M1. Based on intense study and reasoning about the current trends in money supply we are convinced that this comparison of growth in MZM with a lag to the change in the price of gold is significantly much more valid than any other we have been able to produce, if one only considers the correlation of the graphs. And it makes logical sense.
MZM is the most valid measure of broad 'liquid' money in the system. We formerly used M3 but this has not been available, with any published certainty, since 2006.
It would make sense that in a free market, the growth trend of a broad measure of 'liquid money,' as opposed to credit or potential money, would be statistically valid with the price of an alternative currency, or wealth asset, like gold over the longer term.
Speaking wonkishly, our preferred comparison would be to be able to measure the difference in growth between real GDP and the growth in broad money supply, and then trend and compare that with the growth in the price of gold.
Since we have no honest measure of price inflation that task is difficult. Our second preference would be to make a similar comparison per capita the economically active rather than real GDP. Is there an accurate measure of job population growth fluctuations with the ebb and flow of the illegals? We are not sure, but are looking into it.
"O that I could find in the desert a wayside shelter for travelers, that I might depart from my people. For they are all adulterers, an unfaithful mob of traitors. Their tongues are devious weapons, bent like drawn bows. With falsehoods rather than truth they have gained power. They commit one crime after another. They do not know me, says the Lord. I will make Jerusalem a heap of ruins, the lair of jackals. I will lay waste to Judah, a desolation where no one can live."
Jeremiah 9:2-3,11