Tuesday, January 13, 2015

The UK's Jeremy Warner joins the cognoscenti: high asset prices are going bye-bye

"It is as if all the inflation that used to go into consumer prices has been diverted into financial assets and real estate instead. ... Static or falling prices, on the other hand, are always extremely bad for corporate profits in the long term. ... In a deflationary environment, equities and property will inevitably perform badly: only fixed-interest sovereign bonds, the least risky form of investment, do well."