Economics

P = price of goods and services.

M = money available (total) or demand for goods, (cash, available credit, velocity).

T = total goods and services available to buy.

1. Economic Growth = M must rise, followed by T.

2. Inflation = M rises, T stagnates and levels. (more demand than goods).

3. Recession = M drops and T drops.

4. Stagflation = M grows and T drops (high prices, low employment).

To fight inflation:

• Raise interest rates (not too quickly)
• Increase taxes

To fight recession:

• Lower interest rates
• Decrease taxes

To fight stagflation:

• Decrease taxes

Interest Rates

• 1960: Extreme Low, Buy Precious Metals, Sell Stocks
• 1980: Extreme High, Sell Precious Metals, Buy Stocks
• 2004: Extreme Low, Buy Precious Metals, Sell Stocks
• 2020: Extreme High? Sell Precious Metals, Buy Stocks
• 2040: Extreme Low? Buy Precious Metals, Sell Stocks