Having a clear cause for asset value inflation is not mutually exclusive with having asset bubbles. In fact, a reasonable explanation for inflation can well ser

Having a clear cause for asset value inflation is not mutually exclusive with having asset bubbles. In fact, a reasonable explanation for inflation can well serve as a catalyst for asset bubbles. Asset prices that increase modestly due to inflationary pressure can become overheated when the narrative of "buy today or you won't be able to afford it tomorrow!" takes over. Most people who are now bidding up real estate or other assets are driven more by FOMO than an analysis of what fiscal policy will lead to what degree of inflation. And inflation alone won't stop the bubble from bursting, because the same people who are operating on greed now will be operating on fear when the prices start declining, and any rational explanation of what the "right" value of an asset should be will do little to stop the panic selling at that point.