Inflation is near 10%. Fed funds rate is 0.5%. The govt is handing stacks of cash to people. M2 growth peaked last year at 25%. I wonder why the bubble never b

Inflation is near 10%. Fed funds rate is 0.5%. The govt is handing stacks of cash to people. M2 growth peaked last year at 25%. I wonder why the bubble never burst...a real puzzler, probably a question that scientists will never work out (btw, this sarcasm is real, you have people at the Fed who think like this, this is why inequality has skyrocketed...even relative to 2010, when inequality was already high, we are up multiples...no-one has really examined this thoroughly, the Fed lacks the ability to think proactively, it is always reactive/backwards-looking). Something that perpetually puzzles people who don't work in finance (and even then, most people in finance never get it)...because something will happen eventually, it does not mean it will happen today. There is this pervasive mindset: if the value of X is Y, then it should be Y today...or else, why would anyone buy it at Y+10. In finance, the day of reckoning can be postponed for a very long time. Borrow more, make the interest payments, hope something changes. You see this with companies: they don't go bust until someone asks for their money back. And people do not have expectations that separable from today's prices (thankfully, economists are now integrating this into their understanding of inflation)...if something is trading at X, people think that is the same thing as it's value rather than a function of supply and demand in the short-term. To make this conclusion more explicit: the value of a company it's future cash flows, you can say your company is worth $1bn, $10bn, $100bn...but at some point that money has to convert into cash, that is what value is. (The gap between now and "then" is how you make money investing. It is very easy to tell what is going to happen eventually, you can make money because most investors are unable to psychologically bridge that gap, they need today and now. Unf, policymakers have exactly the same mindset...someone else's problem, tomorrow, tomorrow, never today).