Kathy Fettke explains why hard assets like housing outperform during monetary expansion. The Fed created 40-50% of the money supply in the past two years, flooding the market with cash that bids up scarce assets. Housing benefits most because supply is constrained.
It's good to be in hard assets in, in times like this when really what the Fed did, and it's kind of, some of us just scratch our head and go like, well, how could you not see this coming? 'Cause I did, and I don't have access to all the data that you have. You know, they, they brought 50, it was like 40 or 50% of the currency circulating over the last 2 years was new, and that was created by the Federal Reserve. So if you are playing a Monopoly game and, you know, everybody gets their bank, all the bank money's passed out to all the players on the table and there's a certain amount of assets on that table and all of a sudden the banker brings in another box of fake money and that spreads around, but the same number of assets are on the board. Well, everybody has more money to bid it up. So it's, it's obvious that when you flood the market with more currency, that that's gonna drive values up, especially and mainly in assets that where there's a limited supply, right? And that people really need. If there was far too much housing out there, it wouldn't matter how much money was put into the market.
