With the current monetary debasement (aka money printing) it's getting harder to grasp an asset's real value as fiat currencies, their unit of account, are decreasing in value.
It's like measuring your height with a tape measurer that keeps shrinking...
Yes, the measurer makes you appear taller, but are you really?
So, if fiat currencies keep decreasing in value, what happens if instead, we use gold as a unit of account?
Let's make a little experience. Look at the two charts below:
The first one is the DOW JONES denominated in US dollar.
The second one is the DOW JONES denominated in gold ounces.
The number on the left side of the chart tells us how many ounces of gold it would take to buy the DOW.
Now, if we take into account the state of the economy in a post-COVID world, does it make sense to have a leading index near its all-time high?