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by adam_arthur
1244 days ago
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Real GDP per capita is a better indicator of "economic wealth" than valuation. Asset values swing most wildly on the basis of the risk free rate, which is where most of the new "wealth" created since 2020 has come from (ZIRP, QE etc). It is somewhat illusory in that low rates must be sustainable to support elevated valuations. Obviously we're seeing the other side of that with rates having risen due to inflationary pressures. e.g. look at how much "wealth" Japan had in the 1980's before their economy imploded. The imperial palace was perceived to be worth more than all of California, something like that. https://en.wikipedia.org/wiki/Japanese_asset_price_bubble |
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