GDP also = Money * Velocity = Price * Quantity
Currently, almost all countries' consumption, investment, and Export/Imports are all badly impacted bu the Covid-19 pandemic. Only Government spending for almost all countries keeps increasing.... this comes with a cost ..Our financial economy is presently overwhelmed by too much debt, both public and private for most of the countries.
As an investor, you need to aware that there are only two ways to resolve a debt crisis without a strong GDP -- either default or inflate with the caveat that inflation is simply a slow-motion default.
As of now despite all the money printing, the Velocity of money has declined at a similar pace. This resulted in we are currently in deflation, not inflation which is temporary good for bond investors.
But, Fiat currency created by the central bank as a rate greater than economic growth will definitely lead to inflation !!!
Conclusion : The only investment I am bullish in currently money printing, deflation environment, and coming inflation to resolved a debt crisis is -----Gold.
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