Asset Price Inflation

I'll buy you a diamond ring my friend
If it makes you feel alright
I'll get you anything my friend
If it makes you feel alright
--The Beatles

Building on yesterday's observation, Liz Sonders observes that there has been inflation over the past decade--in asset prices rather than in goods/services prices.

Not a lot of real economy inflation over past decade; but plenty of asset inflation pic.twitter.com/GK0t0IdJoa

— Liz Ann Sonders (@LizAnnSonders) February 6, 2020

As Cantillon first observed nearly 300 yrs ago, prices tend to increase most in the vicinity of where new money is created.