Economic growth is driven by investment, period. We all intuitively know this. Businesses and individuals routinely go into market in pursuit of capital so that they can introduce an all-new market good or service that will either exceed what we already have, or capital necessary to produce a great deal more of a good or service at prices that continue to fall.
It’s a reminder of two more things about economic growth: for one, it’s not driven by consumption despite what economists believe. Consumption is what happens after production, and it’s a consequence of producers being matched yet again with investment. For two, it’s a reminder that if an economy is growing, the surest sign of the growth (contra economists yet again) is that the prices of all manner of formerly expensive goods and services are in decline.
This is something to watch as Donald Trump and (?) vie for the presidency. Against objective commodities like gold, the dollar continues to test all-time lows. Love or hate gold, no reader can deny the historical truth that its movements say little about the yellow metal, and everything about the currency in which gold is priced. Measuring gold in dollars, we can easily see the rapid descent of the dollar.
Which is why Donald Trump is in the title of this write-up, but not Trump’s eventual opponent.
Read the entire article at Forbes
