Follow the Money
With the upcoming Twitter IPO set to make new records in valuation without profits corporate debt markets floating on a pink cloud of central bank liquidity, investors might do well to follow the money. At least, we suggest as much in a recent look at real money growth in the US;
This decline [in real money growth] is driven by both a decline in nominal money growth as well as a rise in US core inflation which rose into the middle of 2013 after being very weak in the spring. It is obviously not impossible for real money growth to recover from here, but based on past instances real money growth has further room to fall in coming months. Investors should watch this closely in coming months as real money growth remains one of the best medium term leading indicators we have across economies.