Monetary Factors

Our analysts use indicators such as bank lending, interest rates, money supply and surplus liquidity to predict future liquidity and hence establish, from a monetary standpoint, an overall picture of future stock market potential.

That is to say, the analysts examine how much investable capital will be available for the market in the future. The delayed impact of such indicators can extend to many months.

Our expertise on this topic extends all the way back to 1974 – to the dissertation of Dr. Jens Ehrhardt, the company's founder and Chairman. The insight gained over 35 years ago, that in developed economies, mostly characterised by high debt, the most important influence on economic activity and inflation comes from interest rates and liquidity of the banking system, is still valid.

Monetary factors such as debt and lending, money supply growth, real interest rates, yield curve and currency reserves therefore deserve the highest attention.