The stock markets are overheating. Historically stocks are expensive in relation to earnings, and we are starting to see inflation in the broader economy.
This isn’t great when you’re already struggling to make ends meet or trying to preserve the value of your cash in a world of zero interest rates.
However, Treasury Secretary Yellen isn’t worried, she says, keep the printing presses on to go big or go home. But every day there are new voices warning that inflation is coming and it’s a problem.
If you’ve been watching us since last year you’ll know that Daniel Lacalle has been talking about the dangers of inflation since the first round of stimulus.
Lacalle says it is the poor and lower middle class that get hurt most by inflation. The prices of the things they buy can increase by twice as much as headline inflation.
The Biden administration wants to help people by printing more money, but on the other hand every dollar it prints causes prices to rise. What can it do?