r/valueinvesting
What happens if you adjust the stock market for ALL the money printed by the Top 10 economies?
Analysis adjusting global stock market returns against the expansion of broad money supply in top 10 economies to isolate real vs. nominal growth.
- Significant portion of historical market gains may be attributed to monetary inflation rather than fundamental corporate productivity.
- Global liquidity expansion creates an illusion of wealth accumulation that may not reflect real economic value creation.
We all know the stock market has been on an absolute tear over the last two decades. But how much of that is actual, productive company growth, and how much is just central banks firing up the money printers worldwide?
If we treat the total expansion of the global money supply as our baseline for "zero percent growth," the real returns of our portfolios look entirely different.
Instead of just looking at the US and Europe, let's look at the top 10 economies. Because the stock market is a global sponge, capital crosses borders constantly to find a home in equities. Here is the raw, step-by-step conversion of native currencies into USD using the historical exchange rates from 2006 vs. 2026.
STEP 1: BROAD MONEY SUPPLY CONVERTED TO USD (2006 vs 2026)
1) United States (USD)
2006: $6.85 Trillion
2026: $22.80 Trillion
2) China (CNY)
2006: 34.0T CNY at 8.00 USD/CNY = $4.25 Trillion
2026: 353.0T CNY at 7.25 USD/CNY = $48.69 Trillion
3) Eurozone (EUR)
2006: 6.63T EUR at 1.25 EUR/USD = $8.29 Trillion
2026: 16.29T EUR at 1.08 EUR/USD = $17.59 Trillion
4) Japan (JPY)
2006: 715.0T JPY at 115 USD/JPY = $6.22 Trillion
2026: 1250.0T JPY at 150 USD/JPY = $8.33 Trillion
5) United Kingdom (GBP)
2006: 1.30T GBP at 1.85 GBP/USD = $2.41 Trillion
2026: 3.00T GBP at 1.27 GBP/USD = $3.81 Trillion
6) South Korea (KRW)
2006: 1100.0T KRW at 950 USD/KRW = $1.16 Trillion
2026: 3900.0T KRW at 1350 USD/KRW = $2.89 Trillion
7) India (INR)
2006: 23.0T INR at 45.0 USD/INR = $0.51 Trillion
2026: 233.0T INR at 83.0 USD/INR = $2.81 Trillion
8) Canada (CAD)
2006: 0.75T CAD at 1.11 USD/CAD = $0.68 Trillion
2026: 2.50T CAD at 1.36 USD/CAD = $1.84 Trillion
9) Australia (AUD)
2006: 0.80T AUD at 0.74 AUD/USD = $0.59 Trillion
2026: 2.90T AUD at 0.66 AUD/USD = $1.91 Trillion
10) Brazil (BRL)
2006: 0.70T BRL at 2.20 USD/BRL = $0.32 Trillion
2026: 6.00T BRL at 5.00 USD/BRL = $1.20 Trillion
STEP 2: THE COMBINED GLOBAL MONEY MULTIPLIER
When you add everything up:
Total Top 10 Money Supply (2006): $31.28 Trillion
Total Top 10 Money Supply (2026): $111.87 Trillion
The total fiat currency supply of the world's major economies expanded by 3.58x over the last 20 years.
STEP 3: ADJUSTING THE STOCK MARKETS
Let's assume this 3.58x expansion represents a 0% baseline growth rate (meaning assets must increase 3.58x just to keep up with the dilution of paper money).
The US Market (S&P 500)
Nominal Growth: Went from 1,270 to 7,384 points (A 5.81x nominal increase, or +481%).
Adjusted Growth: 5.81x divided by 3.58x = 1.62x.
Real 20-Year Return: +62.3%
Real Annualized Growth Rate: \~2.46% per year
The Whole World Market (MSCI ACWI / VWRA)
If we look at a globally diversified basket of thousands of companies across developed and emerging markets, the trend is even clearer.
Nominal Growth: A 5.46x nominal increase (+446%).
Adjusted Growth: 5.46x divided by 3.58x = 1.52x.
Real 20-Year Return: +52.5%
Real Annualized Growth Rate: \~2.13% per year
THE CAVEAT
To be entirely fair, this isn't a scientifically perfect economic model. Treating global money printing as immediate asset inflation skips over the fact that inflation has a heavy time delay. Money velocity matters, and capital doesn't flow smoothly or evenly into every single asset class at the exact same moment.
However, as a perspective shift, it is eye-opening. While corporate innovation did create real, productive value over the last two decades (yielding us a modest \~2% true annualized return), the vast majority of your portfolio's massive growth wasn't an economic miracle. It was simply the global financial system flooding the world with currency, and that currency using equities as a safe haven to protect its purchasing power from being eroded.
Love the effort on the currency conversions, but you're missing the biggest piece - dividends. The S&P 500 total return since 2006 is closer to 9x, not 5.8x. That completely changes the 'real return' picture. Also, your 3.58x money supply expansion assumes all that liquidity went into stocks, which is nonsense. A ton went into bonds, real estate, and crypto. The inflation-adjusted argument is valid but way overblown when you factor in reinvested dividends and actual GDP growth. Still, the core point stands: central banks have juiced the system. Just don't pretend stocks haven't delivered real value on top of that.
You’re right my post is a very basic thing. Do you think you could do a more accurate estimate, I’d really like to know. We could see how much of the printed money goes to real estate, bonds etc
Sure but dividends aren't even basic, they are extremely fundamental. Why did you exclude them?
Couldn’t calculate at that time, is much more complex . I meant my post is basic - aka doesn’t include dividends. Not that dividends are basic. Those are important.
Why did you avoid taking into account dividends ? This makes a huge difference.
Accounting for true inflation, stock prices have been on a steady decline from 2001 to 2026.
I don’t think so. Could you back up your exceptional claims?
Look at S&P to gold ratio, then DXY to gold, then DXY to agricultural land, livestock and single family home as a percentage of income