- After the 2008 crisis, Central Banks were not able to drive inflation higher because the money created led to asset inflation rather than inflation in goods.
- Any Central Bank efforts to try to curb inflation will likewise fail, because it will trigger an asset deflation that will flood the real economy with cash.
- If inflation will prove to be anything but transitory, Central Banks will only make some feeble attempts to control it at best.
- Investors should consider staying in stocks this decade, at most using any selloffs caused by feeble attempts by Central Banks to quash inflation as buying opportunities.
- Stock markets should beat inflation, but many stocks will not. Therefore, it is important to have an adequate stock-picking strategy in place that will be adapted to a unique situation.
For further details see:
Inflation May Not Be Transitory, And If So, Cash Will Be The Worst Asset By Far