I'm struggling to make sense of how all asset prices are going upupup, but inflation in CPI terms remains hovering around zero/negative, and bond yield curves suggest low inflation expectations. What am I missing.
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Yield curve steepening, so inflation is expected.
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Yes, but to like 1% maybe... not the hyperinflation scaremongering expectations I’m hearing
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some ideas:
- a lot of people esp americans are asset rich / cash poor / financed by debt, stimulus
- inflation is always measured against a bundle of things, and the mixture changed
- really low interest rates means access to capital / low credit scores is the main constraint
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if the bundles were renormalized around housing prices / food prices / online services you might see real inflation. supply is clearly limited as well
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all else equal, low real discount rates should translate to higher asset values. more dramatically as the "duration" of the asset/cash flow stream extends into the future. even more dramatically if the discount rate is negative.
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