Gold has recently reached an all-time high (ATH), signalling a noteworthy shift in global liquidity patterns. For over a decade, gold has often been the first to move during periods of uncertainty or when liquidity injections are imminent. Its role as a safe-haven asset ensures that when fear or instability rises, gold responds, often becoming a harbinger of what’s to come for other assets.
In the last ten years, a recurring pattern has emerged: gold rallies first, then the Nasdaq (#NSDQ) and Bitcoin (#BTC) follow suit. This sequence has played out repeatedly, with gold acting as an early indicator of broader economic trends. Now, as gold hits its ATH, there are whispers that the bull market is just getting started.
The data backs this up. Over the past five years, the global money supply has surged by 38%. This increase is significant and hints at why gold, a traditional store of value, is seeing renewed interest. Investors typically flock to gold when they perceive instability in other markets or when there’s a flood of liquidity in the system. Given the sharp rise in money supply, it’s no surprise that gold has been the first to react.
What’s particularly interesting is how this pattern plays out across different asset classes. After gold makes its move, the focus often shifts to growth stocks, especially in the technology sector, represented by the Nasdaq. As liquidity stabilises, investors start seeking higher returns, moving from the relative safety of gold to the potential for higher gains in stocks. Bitcoin, often seen as a digital counterpart to gold, also tends to follow this trend. It’s during these moments that both the Nasdaq and Bitcoin experience significant upticks.
This latest movement in gold is more than just a flash in the pan. It’s a signal that the market is gearing up for a broader rally. Some analysts are even speculating that Bitcoin could reach $250,000 in the near future, with $74,000 seen as just the beginning. The convergence of rising gold prices and the subsequent movements in the Nasdaq and Bitcoin suggest that the market is preparing for a significant upswing.
However, this isn’t just about gold, Nasdaq, and Bitcoin. The broader economic context is equally important. The increase in money supply didn’t happen in isolation; it’s been driven by a series of political and economic decisions over the last few years.
The money supply began to grow substantially under the Trump administration in 2020, largely due to monetised fiscal deficits designed to stimulate the economy. This trend continued under the Biden administration in 2021, further fuelling liquidity in the system. The result? Broad-based price increases that began in late 2021.
Inflation is often misunderstood, with many pointing fingers at corporations like Kroger for alleged price gouging. But the reality is more nuanced. Kroger’s revenue growth has been in line with their expenses, which have risen at a slower pace than the overall money supply. Their profit margins have remained flat, hovering at a low 1.43%.
This isn’t a case of corporations exploiting the situation; rather, it’s a reflection of the broader economic environment. When the money supply increases as significantly as it has in recent years, it’s natural for aggregate prices to rise. This is basic economics: more money chasing the same amount of goods and services leads to price increases. The fault doesn’t lie with any single administration or party. Both Republicans and Democrats have contributed to the current state of affairs through their respective policies.
Instead of blaming corporations, it’s more accurate to understand that the root cause of the inflation we’re seeing today is the substantial increase in money supply. When you print a significant amount of money, the value of the currency is likely to decrease relative to hard assets like gold, which is precisely what we’re witnessing.
In gold-denominated terms, Kroger’s profits haven’t increased—they’ve remained relatively stable. What’s changed is the value of the dollar, which has declined due to the influx of more dollars into the economy. This devaluation of the dollar, rather than corporate greed, is what’s driving the perception of increased prices.
This brings us back to the present. With gold reaching new highs, we’re potentially at the beginning of a bull market, one that could see significant gains across various asset classes. The last decade has shown that when gold moves, other assets soon follow. If history is any guide, the recent surge in gold could be the start of something much bigger.
Investors should pay close attention to the signals gold is sending. While nothing is certain in the world of finance, the patterns that have emerged over the last decade suggest that the market is on the brink of a significant shift. As liquidity continues to increase and the global economy adjusts to these new levels, assets like the Nasdaq and Bitcoin are likely to see substantial gains.
In the end, it’s about understanding the broader picture. Gold’s recent ATH isn’t just an isolated event; it’s part of a larger trend that’s been unfolding over the last decade. The market is dynamic, and those who recognise these patterns early are often the ones who benefit the most.
The next few months could be critical. If the pattern holds, we could see significant movements in both the Nasdaq and Bitcoin. Gold has already made its move, and if the past is any indication, other assets won’t be far behind. The bull market might have just begun, and those who are prepared could find themselves well-positioned for what’s to come.
