ALPHA TERMINAL

Macro Realities

The nominal price of an asset is an illusion. To understand true wealth preservation, we must measure performance against the expansion of the monetary base (M2) and analyze the changing correlation regimes between asset classes.

The Liquidity Tide (Priced in M2 Money Supply)
Real Performance vs. The Money Printer
200020022003200520072009201020122014201520172019202020222024202530601003006001000300050009000
  • Mag 7 (M2 Adj)
  • S&P 500 (M2 Adj)
  • Real Estate (M2 Adj)
  • Gold (M2 Adj)
3-Year Rolling Correlation vs. Gold
Decoupling Analysis
2000200520092013201720212025-1-0.500.51
  • S&P 500 Correlation
  • Treasuries Correlation
The Capital Concentration Ratio
Mag 7 / S&P 500 Relative Strength
20002005200920132017202120250255075100

The M2 Reality Check

The Illusion of GainsSince 2008, the S&P 500 is up significantly in nominal terms. However, when adjusted for M2 Money Supply growth (the "DebasementChart"), the broader market has barely generated real alpha. It is merely treading water against the flood of liquidity.

Tech as the New Safe HavenThe "Mag 7" stocks are the anomaly. They are the only asset class that has consistently outpaced M2 expansion by a wide margin. This suggests investors treat Big Tech not just as growth, but as a store of value superior to fiat currency.

The Death of Diversification?The rolling correlation chart reveals a breakdown in traditional relationships. As correlations converge towards 1.0 during liquidity crises, the traditional "60/40" portfolio fails to protect wealth, forcing capital into non-correlated assets like Gold and Bitcoin.