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FED printed huge amount of money, which resulted in huge asset price inflation and "little" regular inflation. So in spite of fundamentals being worse due to p

FED printed huge amount of money, which resulted in huge asset price inflation and "little" regular inflation. So in spite of fundamentals being worse due to pandemic, we price asset more generously. Hard to predict exact future, but expect shocks along the way as massive influx of money makes bubbles and Ponzi schemes more likely. Maybe dollar will go bust, maybe crypto will experience winter, maybe too many ETF on S&P makes it too high vs. wider index or maybe companies with no established business model, but high valuation will go bust. Maybe high energy prices will lead to higher food prices which will cause unrest in poor countries. ... Hard to be certain, but some things are more likely (e.g. crypto recession) vs. the others (e.g. companies with solid fundamentals and great products, but no profit going bust).

phkahler 5y ago
>> and "little" regular inflation. My McDonalds breakfast has gone from $2.12 to $2.86 in one year. This is one of many thing that have gone through the roof. Housing has also gone quite a bit beyond the 2006 bubble prices. Employers at the low end are voluntarily raising wages 50 to 100 percent. From $8-10 to $15-18. New policies are coming out to enroll employees in 401k plans automatically, which means blindly dumping more money into the market (broadly, through funds). Oh it's a bubble alright. If the fed raises rates too quickly they'll pop it the same way they did in 2007. Hence the push for massive inflation which is needed prior to raising rates. On top of normal bubble bust issues, the US faces another threat. If the market tanks, foreign interests stand to sell those bonds and buy our economy wholesale. IMHO expect more inflation with rising interest rates for the next while, unless it pops.