We are entering a transformative world. It will create significant change as we see an increase in inflation for the first time in 40 years. The last great cycle began in 1971 when President Nixon “temporarily” closed the gold exchange window. That led to the long term decline in the value of the dollar which continues to this day. Since inflation peaked in the early 1980’s, we have experienced disinflation which has brought many advantages. Although inflation may ebb and flow, it will nonetheless be enough to change our lifestyles. It may also develop in a different form than before. Devaluation of certain assets, including currency, will be the common dynamic. There will be significant political change.
Presently, there are many dangerous factors that accompany this transformation:
There is significant overvaluation in all financial assets and real estate.
We have a dramatic increase in government debt to $30 trillion. The Debt/GDP ratio in one of the highest ever recorded in America. It is even higher in many other countries.
As you can recognize, there is serious geopolitical and social turmoil everywhere.
America is experiencing unprecedented demographic changes involving extremely high wealth inequality, low birth rates and poor generational mobility.
There will be opportunities but they will occur in a different financial ecosystem.
These will be challenging times that call for a new format in financial planning and investment strategy.