I have read you blog for years. I have enjoyed your view points on most areas except for one.
I understand seeing deflation as the path the markets must take. As you have said many times deflation is good in small doses. Staples products have barely moved in years. Most consumers only see inflation in areas that are connected to their assets, health, and education. Other than that almost no inflation.
But the systemic problems with pensions, social security, bonds, and government debt leaves but one option. Inflation.
Democracy and pain don’t mix. Central banks have shown alone they cannot produce the inflation that they want. I expect this to change in the next downturn. It will change when they team up with politicians.
Helicopter money is the path of least resistance. Who doesn’t want free money? I expect the next downturn to be filled with CB buying mortgages and paying them off. I expect checks to be mailed to the population to “help”.
My question to you is, why would this not happen?
Do you think politicians will let the US burn when they have the power to inflate the debt away?
What do you t whatever to takes by CBs will look like?
Do you think helicopter money will happen?
Lastly do you think inflation is the path forward after a reset?
I am not advocating this is the proper way forward. I do not believe this will lead to prosperity for future generations. I am a realist though and prefer to see what will happen rather than what I want to happen. I try not to let emotion cloud my judgement.