This chart isn't mind-blowing, it's straight-up meaningless.
[edit] Also note the S&P 500 isn't even a consistent numerator, it's an index whose constituent companies are replaced over time at the whim of a committee, lol. Remember when Tesla got added in 2020, and the Apartment Investment and Management Co. got removed? - and as a peer comment pointed out, this doesn't even include dividends and distributions.
I wouldn't say its completely arbitrary given this has been a common discussion point.
No opinions on whether it has meaning, but wanted to add the relevance.
Iirc, the fed also backstopped bonds and bought some stock
So if M2 growth and the S&P 500 are similar, that means that the S&P 500 is fairly well correlated with the size of the economy. Quelle surprise!
If the economy grows, the amount of money needed to lubricate the economy also grows. If the money supply doesn't grow while the economy does then we'd see significant deflation.
So we want these two measures to be relatively balanced, and they are. Yay!
https://www.multpl.com/inflation-adjusted-s-p-500
You can also note that M2 is correlated basically with inflation in the long run (Rsquared ~0.92)
The error on the part of the twitter user is that he's using nominal values instead of % growth (log-log) values. Something you learn in 101 econometrics.
This is why you don't listen to crypto bros on matters of monetary economics.
S&P 500 gained ~40% since January 2020, and CPI gained ~18%.
Even better would be comparing to the total stock market rather than S&P 500. Using something like DWCF or VTSAX
There's alternatives, and trust me, one of them addresses your gripes.
Unless your complaint is very specific, assume you didn't just intuitively out-think a bunch of PhDs whose job is thinking about this
I didn't notice them. Is there anyone who believes Google or Microsoft are now significantly more useful than in 2003? Does anyone feel like Facebook has gotten more useful in recent years? Apart from compensating for ever slower Electron apps, does the additional CPU power in modern Macs really improve my life? How come VS Code still feels so much slower than Visual Studio 6 on Windows 98 SE?
Maybe it's time to accept the obvious conclusion that new != better when it comes to technology.
dont need any financial astrology or jargon to know this
