You are viewing a single comment's thread from:
RE: The Primacy Of Income: The Era Of Gains is over
Yes, the central banks may attempt to flood the world with liquidity during the next recession. But the amounts required to reverse the growing deflationary pressures will be truly gargantuan -- very likely several multiples of the easing we've seen since 2009.At those levels, extreme/hyper-inflation becomes the concern. Prices of everything will shoot the moon. But especially those of assets with income streams that adjust with the inflation rate (rents, dividends, etc).
Why I disagree with this section of the article:
During a recession there are defaults on bonds(And that's why funds with junk bonds lose so much value during a downturn). This is the same as saying: "The money disappeared".
Well, if during a crisis the money simply disappeared and the central banks started to "flood the world with liquidity" or print money like crazy, that "new money" would offset the money that disappeared.
Although, I still agree with the rest of the article.
Btw, great post!
Thanks.