4 ms·
Second half of 1940s and early 1950s are, IMO, a much better data point on how asset prices and economy would develop than 1970-80s than the author chooses. Th
by ptero 4y ago
Second half of 1940s and early 1950s are, IMO, a much better data point on how asset prices and economy would develop than 1970-80s than the author chooses.
The situation in 1940s, with massive post-war government debt and high inflation is a much better match to today's state than 1970s with low debt and high inflation.
- user3939382 4y agoThere are other huge differences though, right? In the second half of the 40s the US had a giant manufacturing economy whereas the rest of the world's manufacturing output was devastated by the war. I'm not an expert in this area but had the impression that it was this imbalance between the US and the rest of the world that played a huge part in our hegemonic success following that period, so I'm not sure what the purpose of comparing to that period would be, you wouldn't seem to be able to meaningfully extrapolate anything about the future out of it.
- ptero 4y agoCertainly. There are big differences between now and 1940s in many things: manufacturing capacity, education levels, societal cohesion, easier acceptance of risk to life, etc. etc. I am just saying that purely from the economic perspective and its key characteristics of asset prices and inflation (that the author focuses on), today is much closer to the 1940s than to the 1970s. And I am personally investing on this assumption, as I think that the fiscal and monetary choices that US will be forced to make will drive the economy along a path with many similarities to the post-war decade. Just my 2c (and, obviously, not an investment advice).