[grey-area]

They're trying to avoid retail deflation. That is not usually related to asset deflation.

Asset inflation has been raging for at least a decade, maybe 2, inflating stock assets, housing and commodities, bitcoin and anything else which promises some return to unseen levels, since they started QE and dropped the low risk rate of return to 0. Retail inflation which they're trying to control is pretty much unaffected by QE and ZIRP and whatever levers they are pulling are not working, they just haven't noticed yet.

So at this point, if someone offers you free money, you say thanks very much and put it in the stock market, like everyone else, because where else can you get a return? And that goes on until the whole thing explodes in a panicked crash when public pretension differs too much from private reality.

Oops.

[imtringued]

Basically the problem is that governments and central banks are following policies that are generally used to stave off inflation. If you have massive inflation what you should invest into is domestic production capacity. Excess production causes prices to fall.

If you want to reliably drive inflation then you must do the opposite. Put dollars into people's hands. Consumer demand must outpace domestic production capacity. Most cases of (hyper)inflation are basically episodes of excessive government spending without the necessary investment in production capacity to back that spending up.

[u678u]

> Asset inflation has been raging for at least a decade, maybe 2, inflating stock assets, housing and commodities, bitcoin

In the US maybe, in the UK the FTSE100 has been pretty flat for over twenty years. Yes houses have gone up a lot, do you really think that can continue? Commodities are flat in the last few decades.

[grey-area]

No I don't think the asset bubble can or will continue indefinitely, hence the last sentence above.

Re commodities Gold has risen a lot in the last couple of decades.

[Temporarily21]

So hodl gold&silver for economic protection?

[grey-area]

Historically those have not been great bets to hedge against a crash - they tend to crash with stock prices. See 2008 for an example.

[Temporarily21]

But they do hedge against inflation, right? i assume that’s what the next crash might look like.