Michelle, re: inflation, I remember it affected everything in the 70's. We weren't as well connected back then. One thing we have now is greater efficiency of world trade, as well as greater acceleration in technology-driven productivity than the 70's and 80's. We're only 5% of the population, and emerging countries will keep inflation in hard goods under check for several years until they industrialize & we will continue to get "stuff" cheap. Soft goods, software, and services people are inflating costs dramatically but as long as productivity increases at the same rate, it counters it.
That's the theory. I'm not an expert, but I think it's inevitable we'll monetize part of the $15 trillion in "wealth effect" that will show up in threads like this where the talk suddenly turns to what color Lexis, or Gulfstream to get. I just got a 45' cruiser, and man, the prices. I'd be an idiot to buy it 5 years ago, and probly an idiot now, but a happy idiot! That might be a good definition of the wealth effect.
The rest of it is the efficiency created by the internet which could be worth several trillion in productivity, balancing out that wealth effect. Anyone disagree?
It won't reduce gold, real estate, or art, however IMO. That stuff is going up. I'm long net plumbing, but also NEM and r.e. |
