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Yes, this is indeed about the low bond yields paired with inflation expectation - low real yields. But I would not hold my breath that this changes much after

Yes, this is indeed about the low bond yields paired with inflation expectation - low real yields. But I would not hold my breath that this changes much after Corona. In 2019 the Fed tried quantitative tightening, which resulted in the December stock market correction, and a big overnight lending spike. From there they resumed QE (Which was one day supposed be a temporary measure in the great financial crisis). They did drop interest rates again in response to Corona, though. Not before. J Powell already promissed rates would stay as low as they are for 2 years. But right now the yields of the 10 year, e.g. are going below what a new issue should yield I believe. Gold/Silver should lose some steam when the DXY goes up, or bond yields increase. (Both of which should also have a negative influence on stock and bond prices). Also don't marry the idea of inflation to the CPI. There is asset inflation (think housing market and stock market), and inflation in certain products like food. But other things like transportation (perhaps of lower importance to poorer than for rich). It's not a black and white matter.

alasdair_ 6y ago
Taleb makes this same point about inflation repeatedly - that the things he plans on spending money on in the future may inflate far more than the CPI.
- jkhdigital 6y ago
  Yeah, almost like inflation is concentrating into a handful of Giffen (I'm using the term loosely) goods--healthcare and education most notably.
  - smabie 6y ago
    And what do Healthcare, education, and housing have in common? Massive influx of money by the government.
    - lkrubner 6y ago
      Actually, you should say: "Massive indirect unguided subsidies of money by the government." Where the government does something directly, the results can be good. Look at Medicaid, which is generally thought to be the most cost effective form of health insurance that exists in the USA. The government overseas that directly. But everywhere the government tries to offer end consumers a subsidy, so they can then try to use it toward some social goal, the result seems to be inflation.

alasdair_ 6y ago

Taleb makes this same point about inflation repeatedly - that the things he plans on spending money on in the future may inflate far more than the CPI.

jkhdigital 6y ago
Yeah, almost like inflation is concentrating into a handful of Giffen (I'm using the term loosely) goods--healthcare and education most notably.
- smabie 6y ago
  And what do Healthcare, education, and housing have in common? Massive influx of money by the government.
  - lkrubner 6y ago
    Actually, you should say: "Massive indirect unguided subsidies of money by the government." Where the government does something directly, the results can be good. Look at Medicaid, which is generally thought to be the most cost effective form of health insurance that exists in the USA. The government overseas that directly. But everywhere the government tries to offer end consumers a subsidy, so they can then try to use it toward some social goal, the result seems to be inflation.