From Jan, 1960 to Jan, 2024, M2 grew from 298.2B to 20,751.4B, or 6.85% CAGR.

The S&P 500 (just check some charting website like tradingview, it's too big to paste the chart here hehe) went from about 59 to about 4,700 over the same period, or 7.07% CAGR.

Is it fair to say that the only reason investors actually got richer over the same period (by way more than 0.22% yearly), is that the United States has the power to "export" those dollars (and the subsequent inflation) worldwide, at least to some extent? So most of the inflationary pressure, other than during the 70s, became just asset inflation? Will the US and its investors be screwed if/when the dollar lose its reserve currency status?

I'm not very knowledgeable about this kind of academic and historical macro, or the tools to measure it, but I don't think you can have too much confidence that your numbers capture what you think they're capturing. Does that 59 to 4700 include dividends? If it doesn't, that's a problem. Also, the SPX doesn't seem like the greatest measure of inflation. There are thousands of other stocks, and the components change frequently. How much do your numbers change if instead you'd chosen 10yr bonds or the Russell 3000 or a basket of commodities? And M2 doesn't account for velocity of money, which is extremely important for measuring inflation. How has velocity changed over time? So your whole premise seems way too simplistic.

As for why people are richer in the US, productivity improved. That includes innovation. I don't think it really has anything to do with being the reserve currency. Maybe you could compare M2 and the SMI in Switzerland, and M2 and the FTSE in the UK, Nikkei in Japan, etc., and see if they experienced similar outpacing of their flagship index compared to money supply despite not having the world's reserve currency.

But I think this whole exercise is a big waste of time.

the term 'Richer' is relative... Just because you posses more Currency, does NOT always mean that you are Richer as purchasing power has exponentially been eroded over that same time period.

The correct measure is not how much USD you posses, but how much purchasing power do you posses.

In answer to your query, will the US investors be screwed if USD stops being backed by and traded in Oil reserves... the answer is YES.

the movement away from an Oil based economy to one of electricity is a giant Cabal designed to weaken and disrupt the stature of the United States of America.

Different strokes for different folks . Thanks everyone for your input.

No dividends, definitely a primary mistake made by me. Unfortunately I can't find SPXTR data going earlier than the late 80's.

Jan 1989 to Jan 2024, it's 10.70% cagr for the S&P 500 + dividends, and 5.69% for money supply. Ignoring productivity was also a mistake, thanks for pointing it.

Dividends are over rated... Growth and network effects are where wealth is created.

Dividends are good for hedging and protecting already accumulated wealth.

Hey!

Returns from 1989 to 2024 drop to 8.47% if I use the index without dividends reinvested. A difference of 2.23% yearly over 35 years seems a lot to me.

Caveats obviously are that you're not getting only 8.47% from the raw S&P 500, you're getting that plus the dividends, and then taking the dividends out to spend or reinvest somewhere else, paying taxes if you have to pay etc, so more than 8.47% and less than 10.70%.

In 1945 an ounce of Gold was 35 dollars and it's now 2721 dollars.

In 1945 the S & P was 15 dollars and is now 5864 dollars not including dividends.

So yes a lot of the gains in the S and P are due to the dollar losing it's purchasing power.

Another phenomena is businesses are constantly being replaced by new businesses that become technologically irrelevant or broke.

The components of the DOW Jones are all different than they were 50 years ago.

If you take a very mature company like Coca Cola their beverages are already in every store, so it's only real way to grow is raising it's prices, via inflation.

Oh, you're banned. What did you do my friend?

I was going to ask if you have the same data, or can point me to a place where I can find it, of how US real estate performed on average over the period. Bonus point if you tell me what the average rental yield was, so I can compare it with the S$P + dividends.

Residential and Commercial separated, preferably. Pls

Looks like he ventured into the Politics forum and probably said something dumb. Assuming it was a 2 week ban he should be back today.

If it was perma... well...