Max, I think your numbers are fine. I could have been more specific. I think there will be a substantial lag in the market 'inflating' *because* of monetary inflation. Just to throw a dart, I'd put this around winter of next year, say 18-20 months away. The worst case seems to be unfolding (Zimbabwe Lite). I don't expect their kind of numbers, but 20% seems very possible at the peak in the next 2-5 years. Note that it takes less than three years at that rate to double the price of a car or house.
Those in the stock market will see dramatic gains, yet also dramatic losses in purchasing power, due to a lag, and due to enormous tax friction. A SmartyPants investor will be lucky to come out -5% compounded annually. A DumbAzz investor will be lucky to come out -15% annually in purchasing power.
But first... yes! I totally agree, the earnings numbers are showing hope, or denial, of a LOT of positive surprises. Not just positive, but GAINS y-o-y. I just don't see it happening. The reality of the NEW REALITY (really!) has not yet dawned on most people. They expect things to SNAP BACK, and they ain't. But, yeah, they will SNAP!
My canaries are the parents at my kids' high school, who still are flying all over the country to see what universities strikes their kid's fancy, as if that is all that matters.
I was a product of the terrible economies of the 70s. I looked for two things: 1) what could I afford; and 2) what degree puts me in good shape for stable employment.
I've been at my current company for 25 years, btw. I started two days after getting my degree.
I still don't see the trickle down from 401k balances collapsing to where people realize they must change their vision of the future to account for what happened on Wall Street and in D.C. as permanent.
And here's a big one... I still have yet to see anybody outside of these "halls" even comprehend how the power in Washington has shifted from Congress and the White House to the Federal Reserve. Was it a coup? Follow the money... |
