portfolioafterlife
too fast for love
For the past decade, many investors have been living in the Matrix. Buoyed by extensive quantitative easing and overseas production, their portfolios have ballooned.
Unfortunately for them, this is the real world – and inflation is the blue pill.
A return to the real world – a place where asset prices and value creation move together – is not so bad. In this article, I will try to explain why.
To make navigating this article easier, let me provide a brief outline:
- First, I’ll talk about how money printing manifests in the economy.
- Second, I’ll describe conditions when money printing does – and doesn’t – create inflation.
- Third, having shown how inflation is caused by a gap between money creation and value creation, I’ll explore how various government measures impact our current situation.
- Fourth, I’ll examine quantitative easing and illustrate its effect on asset prices.
- Fifth, I’ll explain my predictions for asset markets, and discuss the role of supply shocks (and why inflation has remained in check until recently).
- Finally, I’ll conclude by reframing our collective moment in time.
This Is Not the Matrix and You Are Not “The One”
For the past decade, many investors have been living in the Matrix. Buoyed by extensive quantitative easing and overseas production, their portfolios have ballooned.
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