http://seekingalpha.com/article/261512-exploring-stocks-and-commodities-over-the-past-10-years-through-charts
A good artcile from Seeking Alpha. It showed the growth in money supply of US. It also showed that US stocks have stayed at the same level for the last 10 years, while commodities have shot up.
There's a problem in the argument because during the last 10 years, emerging market equities, particularly Russia, Brazil, China and India have shot up like commodities. So it's not true that commodities are best performers. Countries that export commodities have been leveraged plays on commodities.
Look at the chart on money supply of the US. It is true that money supply's volatility causes stocks and commodities to fluctuate.
What causes money supply to fluctuate? Velocity and Interest rates. Velocity is influenced by consumer sentiment. If you're worried that you won't keep your job, you spend less. The chain reaction is that others will get less business from you and they will spend less as well. The multiplier effect occurs.
Interest rates are inversely related to money supply. The higher the rates, the lower the supply due to bank lending being curtailed when rates are high. If you ask me, which factor has a bigger effect, my answer is velocity. In 2008, even when rates plunged, money supply shrank drastically when it should have risen. It shows that consumer sentiment has a bigger impact than rates. When you're losing your job, you won't spend and the whole economy gets a fever. Even if rates are near zero, the whole economy will still fall ill, albeit the medication of zero rates helps speed up recovery.
Worse, the chart shows that income has not kept up with inflation. Purchasing power has been shrinking. The only way to maintain purchasing power is by investing in commodities and stocks.
