>>21094720I don't think it's in any way an actionable ratio. Money supply and inflation aren't always directly connected. And there are times when inflation is high when gold is not performing well (see the last few years). M2 also doesn't take credit into account, just cash and short term deposits. So if there's a liquidity squeeze and credit decreases significantly you shouldn't be surprised if gold goes down while M2 is stable.
In principle I do agree that gold beats currencies over the long run though, but I don't need a ratio to tell me that. I think gold should be considered a hedge against lack of confidence as opposed to just "blanket" inflation.
