SP500 "inflation rate" is like the covid years, ~14%/year
It seems like the SP500 still "wants" to inflate at about the same rate as during the covid years, ~14 nominal%/year (log rate 0.145)? That includes real economic growth, net exports, foreign investment, etc, but I have the suspicion that ongoing deficit spending is a key reason, in spite of rhetoric to the contrary. Nobody wants to be seen to cut spending and hurt people. It's like repeatedly through history:
David Fischer 1996 "The Great Wave, Price revolutions and the rhythm of history"
Ray Dalio 2021 "Principles for dealing with the Changing World Order"
Presumably, you will be taxed on the basis of greatly inflated nominal even if real returns are negative. I am also wondering if this is a permanent change as compared to the long term logRate 0.03:
SP500 semiLog trendline 1926-2022 : 10 power (-56.7736 + (0.029831 * year))
In stressed periods of history going back perhaps to King Hammurabi, its seems that ALL systems run into the same problems, try to squirm their way out using the same tricks, and ultimately fall apart. But that can take a very long time. Strangely, mathematician Alfredo Pareto, and later Benoit Mandelbrot, also came to another similarly strange conclusion that independent of the type of system, the wealth distribution in societies is always the same. So much for sociology and chinks of psychology?
All of this seems to render some of our favourite subjects for irrelevant. Not really, just our arguments and favorite beliefs?
David Fischer 1996 "The Great Wave, Price revolutions and the rhythm of history"
Ray Dalio 2021 "Principles for dealing with the Changing World Order"
Presumably, you will be taxed on the basis of greatly inflated nominal even if real returns are negative. I am also wondering if this is a permanent change as compared to the long term logRate 0.03:
SP500 semiLog trendline 1926-2022 : 10 power (-56.7736 + (0.029831 * year))
In stressed periods of history going back perhaps to King Hammurabi, its seems that ALL systems run into the same problems, try to squirm their way out using the same tricks, and ultimately fall apart. But that can take a very long time. Strangely, mathematician Alfredo Pareto, and later Benoit Mandelbrot, also came to another similarly strange conclusion that independent of the type of system, the wealth distribution in societies is always the same. So much for sociology and chinks of psychology?
All of this seems to render some of our favourite subjects for irrelevant. Not really, just our arguments and favorite beliefs?