Gold’s purchasing power has remained remarkably stable in the past 400 years, at least until the end of the Bretton Woods system in August 1971. The ensuing debasement of major currencies created a new competition between gold and currencies to attract world savings, and also between currencies themselves. Crucially, gold refused to falter in the face of competition. Quite to the contrary, the metal remained, 50% of the time, the best “money” to secure savings from 1972s onwards.

A simple way to cluster monetary policies is to listen to the market. If the ancient form of money‒Gold‒starts to return more than the new form of money‒fiat currencies- from the major monetary centers, the world enters into the ‘Keynesian’ territory. In other words, fiat currencies abandon their role as stores of value, and start debasing. This, eventually, leads to the ‘euthanasia of the rentier’.

Conversely, if fiat currencies return more than gold, the world becomes ‘Wisckellian’, insofar as cash rates are driven by the natural growth rate of the economy, and not cut to artificially low levels by Central Bankers.

Smith refers to favorable economic situations when the allocation of resources is well-optimized. Malthus refers to macro readings exhibiting signs of shortages or instabilities. TrackMacro synthesises the key macro readings on the world’s major markets into seven separate categories. Namely:

The Modern Portfolio Theory, pioneered by Harry Markowitz, is based on the assumption that multiple independent opinions in interaction lead to a market controllable ‘noise’, well represented by a Gaussian distribution of assets’ returns. Such an assumption holds relatively well, say 80% of the time.