This is one of the methods that I use to attempt an estimate of which general USD price inflation relative to 2008 is expectable, and thus which pm prices should be reasonable to target from the perspective of some1 that stacks them as long term savings. The . containing balance figures are billions, the other are millions. 2008 BOGMBASE 2008-08-01 847628 BASE 2008-07-30 876.411 EXCRESNS 2008-08-01 1.875 > NetBASE (BASE - EXCRESNS method) 874.536 > M1 2008-08-04 1421.8 > M2 2008-08-04 7748.2 2013 BOGMBASE 2013-11-01 3684554 = 2008 x 4.35 BASE 2013-10-30 3628.139 = 2008 x 3.14 RESBALNS 2013-11-01 2463.012 = (-RESBALREQ) 2008 x 1276 RESBALREQ 2013-11-01 70483 > NetBASE (RESBALNS - RESBALREQ method) 1235.610 = 2008 x 1.41 > M1 2013-12-16 2645.9 = 2008 x 1.86 > M2 2013-12-16 10976.7 = 2008 x 1.42 Definitions: BOGMBASE Monetary Base; Total - equals total balances maintained plus currency in circulation. BASE The Adjusted Monetary Base is the sum of currency (including coin) in circulation outside Federal Reserve Banks and the U.S. Treasury, plus deposits held by depository institutions at Federal Reserve Banks. RESBALNS Total reserve balances maintained is the amount of balances institutions hold in accounts at Federal Reserve Banks that are available to satisfy reserve requirements. RESBALREQ Reserve balance requirements series is the portion of the reserve requirements not satisfied by vault cash. M1 Includes funds that are readily accessible for spending. M1 consists of: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) traveler's checks of nonbank issuers; (3) demand deposits; and (4) other checkable deposits (OCDs), M2 Includes a broader set of financial assets held principally by households. M2 consists of M1 plus: (1) savings deposits (which include money market deposit accounts, or MMDAs); (2) small-denomination time deposits (time deposits in amounts of less than $100,000); and (3) balances in retail money market mutual funds (MMMFs). What do we see: 1) the total balances+circulation grew with 335% 2) the adjusted monetary base grew with 41% 3) the short term deposits grew with 86% 4) the long term deposits grew with 42% (this thus includes the M1 growth) This makes clear how Quantitative Easing was mostly a balance-only occurrence. The economy saw only a fraction of the new dollars. If we would assume 4) M2 being the money available to spend (thus ex. reserves): 2008: 7748.2 2013: 10976.7 = 2008 x 1.42 So, the amount dollars available to spend, grew with 42% Grabbing the 2008 silver prices: 2008 bottom $8.88 > 2013 bottom $12.61 actual $18.61 2008 average $14.89 > 2013 average $21.14 actual $23.83 2008 peak $20.92 > 2013 peak $29.71 actual $32.23 Grabbing the 2008 gold prices: 2008 bottom $712.5 > 2013 bottom $1011.75 actual $1195.25 2008 average $871.96 > 2013 average $1238.18 actual $1412.05 2008 peak $1011.52 > 2013 peak $1436.36 actual $1693.75 To target purchases, bottoms are interesting, for silver that's $12.61, for gold that's $1011.75. To take into account is that both bottoms and peaks are very short time opportunities (highdays of crisis, panic moments in 2008, freefall of everything), so quite unrealistic (one can be lucky though). But bottom+1/3 of the deviation from the average, should have a reasonable chance, which is in case silver $15. At the moment, solely based on the trend of the silver price at a specific futures market net position, I'm targeting $17-18 for a next purchase. But with current stock market record highs, when they go again the red high candlesticks way, the next crisis, and without seeing general prices going up more, $15 silver would have a reasonable chance to reoccur. For those that wanna risk waiting and hope finding. EDIT corrected error due to higher money supplies incorporating lower.
