If the fed continues tapering why would you expect inflation? The inflation already happened. It’s staring you right in the face with record levels on the DOW and S&P. I expect to see deflation in asset prices once the spigot gets turned off. It will likely get pretty bad because there’s tons of leverage being used to bet on higher assets prices right now. Margin debt in the stock market is at record highs.
I actually expect main street to weather the coming crash in assets prices better than it has in the past because it hasn’t been benefiting much from rising asset prices. Also many companies have cash reserves so that they aren’t bankrupt when lending gets tight in a coming recession. Sure there will be unemployment increases and people might start redefining their retirement dreams once their portfolios get blown up but we’ll survive.
