The Coming Inflation

Via Zero:

In the late stages (of coming inflation), those same people will conclude that it is permanent. Throughout the process, each of us, individually, will see what we want to see, hear what we want to hear, and believe what we want to believe. Those things are always true, perhaps now more than ever. We will also find the period ahead deeply unsettling. Change is hard to process. And more things are changing now than at any time in our lives - such is today’s utterly unprecedented pace of innovation and disruption.

In such a state, it is natural to cling to our anchors:

• Our policymakers will point to the inflation metrics that they themselves have engineered in such a way to ensure stability, even if they long ago diverged from reality. 
• Bond investors will look to the spreads between overnight rates and two-year bonds, five-year, ten, thirty. And despite the reality that the government has run 15% deficits for two years, funded by the Fed which simply creates the money, they will cling to the anchors that have governed the well-behaved yield curve for the course of their careers.
• Equity investors will hold tight to the relationships that anchor their value relative to bonds.
• Not a solitary investor in the mainstream will be prepared to deviate from the benchmarks to which they have anchored their careers.

 

And yet, all of us will begin to increasingly wonder, whether digital assets, which have no real history, no anchors, are the first to provide a glimpse of what lays beyond the horizon. 

You can read the whole thing here. In the meanwhile, everyone's favorite Shiba's surged to .416 at the time of writing. Much wow. Go, pup.

Ad Lunam,

LSP

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