by Alasdair Macleod, Gold Money:
Recently the GoldMoney Foundation published an article proposing a new measure of money supply, the Fiat Money Quantity (FMQ), so that a direct comparison can be made between gold and currency, principally US dollars. This has two important functions: it allows economists to compare sound money with fiat currency for the purpose of monetary analysis, and it allows us to adjust the price of gold in dollars to allow for both the increase in the quantity of FMQ and also the accumulating addition of newly mined gold.
The original article shows just how unsound currency has become since the banking crisis, with FMQ appearing to be hyper-inflating from that time. This article explores the implications for the price of gold.
Firstly lets look at Chart 1, the chart of FMQ.
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