maplevalue

If inflation is at 6% for a sustained amount of time central banks will have to decide between 1. Keep low rates while letting inflation run at 5-10% for a few years to decrease the real value of debts while the general populace grumbles (much like Canadians have grumbled about higher real estate) but asset owners do well. 2. Raising rates in a meaningful fashion, leading to the collapse of the entire financial system and bankruptcy of the governments that appoint central bank chiefs. My money would be on 1 being the more likely outcome.

Hence why I prefaced it by "on a much more speculative note" :D

I think when looking at a broader range of stores of value it is easier to see the currency debasement. Stocks/real estate being prime examples, trading cards (https://www.pwccmarketplace.com/market-indices) and fine wine (https://www.liv-ex.com/news-insights/indices/) being more esoteric examples. On a much more speculative note I increasingly am of the mind that gold is becoming a relatively poor store of value. It is not too big of a stretch of the imagination to think asteroid mining, while somewhat fanciful at this very moment, has the potential to impact precious metals' values in a big way over the next 50 years.

What would be so bad about that? I rather Central Bank's focus on the real economy and less on boosting financial assets. If main street is doing well with higher wages, better quality of life, and less inequity while stock markets are going down, I'm perfectly okay with that. But we don't really see that anymore. We can't withstand prolonged pain in the financial markets anymore. After some signs of distress, CB's come in with their massive rate cuts and QE infinity. I overall agree with you, one of the reasons the CBs/governments would not agree with you is because the 'common man'/'average voter' has become levered up ever since QE got going (see Canadian debt levels and real estate). Governments/central banks will do whatever it takes to try and keep these people out of a negative equity position, and will likely tolerate higher inflation.

This is the million dollar question for asset markets. Current prices for stocks/bonds/housing are all dramatically 'wrong' in a higher rate world, particularly one where higher rates are driven not by productive economic activity but by high government spending.

I am currently reading the book Studies in Hyperinflation and Stabilization http://www.centerforfinancialstability.org/hyperinflation.php which is a collection of oldish papers examining different hyperinflations which have happened through time. The first lesson they state (page xxii) is that "We, like others, have identified the cause of hyperinflation as the substitution of [money creation] for the tax financing of government expenditures" (i.e. when instead of raising taxes to finance government spending the central bank just prints). Now not wanting to dive into politics too much, but I think its safe to say in the US/Canada at this point there is very little appetite for the type of tax increases that would be necessary to fund the type of deficits of the past year, and are expected for the coming years. As well, the politically easy type of taxes that may be implemented (i.e. wealth taxes, tax on high income earners) will not end up generating that much revenue. With this in mind it is very easy to imagine a high inflation scenario (maybe not hyperinflation, but higher than most of us would have experienced in our lifetimes) over the next decade or so, the government keeps printing because it is the easy thing to do.

Worth remembering that the constraint on Fed's ability to control rates is inflation. All the jawboning in the world will not be able to prevent the market radically repricing the Fed's path if inflation starts showing up. M4 up ~30% YoY + economy is just about to open up + have some more stimulus coming down the pipe; a scenario that looks pretty inflationary to me. Buckle up. Source on M4: http://www.centerforfinancialstability.org/amfm_data.php

This whole episode makes me thankful for the existence of a professionally managed CPP in Canada. Sure, people may have their gripes about CPP (and them running ads), but at the end of the day having CPP as a backstop protects investors against themselves doing stupid stuff like investing in meme stocks.

Agree with this. I am not an agricultural expert or anything but to me it makes sense that the equipment makers or the seed producers are probably best suited to deliver this type of technology given they have huge scale and established relationships and could runover a small Winnipeg based firm.

Thanks for sharing!

300,000 dual citizens in Hong Kong must choose between Canada and China after policy change - https://nationalpost.com/news/300000-dual-citizens-in-hong-kong-must-choose-between-canada-and-china-after-policy-change Not an expert in this but certainly not a negative for CAD real estate.

I heard yesterday was particularly bad with respect to outages, so your experience is unsurprising.

FT - Moderna develops new vaccine to tackle mutant Covid strain: US drugmaker warns current jab is less effective against South African variant https://www.ft.com/content/c0c8f72c-e58e-4319-80c4-0db153ad85db?emailId=600ec795865ece0004bf08b2&segmentId=3d08be62-315f-7330-5bbd-af33dc531acb

On the topic of mutations/endemicness, it seems one rarely hears about mutations leading the virus to become more deadly (i.e. right now it seems like the UK variant is just more contagious). Is there a natural tendency, or a medical term for, these viruses to become more contagious/less deadly as time goes on (from an evolutionary perspective this would seem to make sense)?

The number of very low priced prefs (i.e. has the most upside in a higher interest rates scenario) is not that big. TRP-H being one of them.