Global Equity & Liquidity Dashboard
Analyzing the MSCI World Index relative to US M2 and Eurozone M3 money creation.
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... since Jan 2020
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... since Jan 2020
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... since Jan 2020
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... since Jan 2020
Performance & CAGR Analysis
Compound Annual Growth Rate (CAGR) computed for the active timeframe.
| Asset / Metric | Start Value | End Value | Total Growth | CAGR |
|---|
Stock to Liquidity Correlation
Pearson Correlation Coefficient (r) showing connection intensity.
| Pair Comparison | Era / Era Type | Correlation (r) | Correlation Strength |
|---|
The 2020 M2 Anomaly (Regulation D)
In May 2020, the Federal Reserve altered its regulation rules (specifically Regulation D) to reclassify savings accounts as liquid transaction accounts. This caused savings depositsāwhich were previously excluded from some narrower monetary definitionsāto be reported in a way that artificially surged M2 overnight.
While central banks did print trillions during the pandemic, the sudden vertical spike on the M2 chart is partially a regulatory reporting artifact rather than entirely net new printed capital. Keep this in mind when evaluating correlations starting in 2020.
Why Look at Liquidity-Adjusted Prices?
When currency supply expands rapidly, the prices of scarce, productive assets (like global equities) rise naturally due to monetary inflation, even if their underlying profitability remains constant. This is known as currency debasement.
By dividing the MSCI World index by US M2 or Eurozone M3 money supplies, we obtain the liquidity-adjusted price. This reveals whether stock portfolios are truly outperforming the growth in money supply, or if they are simply floating on a rising tide of monetary dilution.