Artemis' Snowden: Why inflation is not here to stay

Current consumption levels are unsustainable

clock • 6 min read

The debate continues as to whether inflation is here to stay and that makes bond investors understandably nervous.

Inflation usually leads to higher interest rates, which erode the value of a bond's face value and can be particularly calamitous for low-yielding assets with a longer maturity. I have little doubt that the current inflation story is a transitory one. The first thing to bear in mind about the inflationista case is the argument that, by definition, quantitative easing leads to inflation. This is based on the classic equation you learn in A-level economics that inflation is a function of the amount of money you print and the velocity by which it circulates around the economy. Weimar ...

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