We are very near to being able to declare absolute victory on the ATOM thesis.
Remember that March 15, 2020 really was the 'Netscape Moment' in Economics. The US Fed Funds rate, which was the only major rate in the world that was foolishly high at that point, went from 1.5% down to 0% (permanently), and trillions in new monetary creation commenced. As of August, the four major central banks are at +35.3% on a year-over-year basis (source : Yardeni).
Meanwhile, the US 10-yr Treasury Note languishes at 0.7% yield, the weighted average yield of all high-grade 10-yr Sovereign Bonds worldwide is at approximately 0.00%, and oil remains below $40/barrel even now, while the tech-laden Nasdaq 100 continues to make new all-time highs. What more proof is required, that monetary creation a) does not cause inflation up to a pretty high annual rate of creation, and b) this creation finds its way into technology, to produce more technology?
Now, we get the benefit of probing were the ceiling of the monetary creation gradient might be. I have maintained in the ATOM publication that 16-24% was the optimal rate of increase (based on my own proprietary research about the depth of technological density and acceleration), with a lower number resulting in insufficient inflation and the higher number causing brief inflation. Now, we happen to see a 35.3% net YoY increase. This is well above the band I specified above, but it also follows a period of slack, which means the CAGR over the last several years is still well below the 24%/yr upper bound.
If the current YoY increase is in fact an overshoot above the optimal zone, there will be a very brief blip in the CPI. This will cause the disgruntled inflation hawks and PhD Economists to emerge from the woodwork to point out how 'the entire ATOM thesis is wrong'. They will be suitably embarrassed yet again, since the blip will be very brief once the trendline of 16-24% catches up. As we can see from the second chart, the CPI is just not having it.
Nor is the Goldman Sachs Commodity Index, which represents worldwide prices of all commodities (oil, gold, natural gas, silver, coffee, etc.). It is down a whopping 60% from its 2010 levels, despite all the QE. Even this index does not represent the accurate scale of commodity deflation, since I contend that computational power, storage, and bandwidth should all be commodities in this index (as volatility already is, despite not being a physical form). Inclusion of these components would reveal a faster as well as more accurate deflationary picture. This trend can only continue and accelerate through the 2020s and beyond.
Also note how large the base of cumulative monetary action now is. As we see from the chart, the YoY dollar amount is $7 Trillion, and this is just for the four largest central banks (which amount to 85% of all monetary creation). Just to stay at 16% YoY growth for the next 365 days, another $4.3 Trillion has to be done.
As I said in June :
I said elsewhere that the decade of the 2010s had $23 Trillion of cumulative QE worldwide. The PhD Economists of the world, who have predicted 100 of the last zero bouts of hyperinflation, still believe QE is an aberration and assume that the cumulative QE will be reversed (i.e. that the 2020s will have -$23 Trillion of cumulative QE). I claim the opposite, which is that under both ATOM principles and the Accelerating Rate of Change, the 2020s will see about $100 Trillion of QE, and that this will move towards sending cash directly to people (rather than the esoteric bond-buying that comprises of QE today, which inevitably concentrates the benefit of this monetary creation in very few hands).
Does anyone doubt that the 2020s will in fact see $100 Trillion of QE? The first eight months of 2020 are certainly on track for that trend. That means it is also on track for a greater diffusion of future monetary creation. The current channels are super-inefficient, super-saturated, and frankly, one could scarcely devise a better way for all new monetary creation to go just to the wealthiest tech billionaires while average people get nothing.
Furthermore, while bad governance can destroy anything (and this sort of new safety net actually increases the level of bad governance, as the penalties are delayed), the fact that the central banks of the world reacted so quickly means that a number negative economic phenomena might very well be in the past. For example :
i) There may never be a traditional recession again, based on the technical definition of a recession, which is two consecutive quarters of negative 'Real' GDP.
ii) There may never again be a stock market correction so severe that the S&P 500 remains over 10% below its all-time high for a full calendar year.
iii) The S&P 500 may never again go more than three years without making an all-time high. Remember that dividends (about 1.7%/yr) also exist.
Points ii) and iii) above prove that the equity index, rather than gold, is the true safe haven. The gradient of progress in the modern era is just too steep for the multi-year recessions of the past to happen anymore barring the worst governance. The divergence between the performance of gold vs. that of the Nasdaq 100 over the last decade is extreme.
The proof is piling up. The Economics PhD ivory tower cannot continue their denial forever, as they already are in the dustbin of history. Yes, most recent articles here have been very similar, but remember that we are in the midst of a seminal historical turning point that almost no others have caught on to yet.
Update : For those worried about Money Supply, note that M1 has increased 42% YoY, and M2 about 24%. This is at a level where even I thought there could be inflation, since M1 is the most liquid and rapidly-circulated pool of money. Such inflation could happen, but has not happened yet.
If big increases in even M1 have not caused inflation (still TBD), then the case for ATOM-DUES is even stronger, as one of the last few unknowns has been exposed as a non-event.
Related ATOM Chapters :
2 : The Exponential Trendline of Economic Growth
4 : The Overlooked Economics of Technology