Know The Now – Are equities an effective inflation hedge?

“Inflation is always and everywhere a monetary phenomenon”. Famous words by Milton Friedman. But global central banks have been pursuing massive monetary expansion for 13 years now, and there has been scant evidence of inflation. Despite monetary expansion, the predominant force over the past decade has been low inflation. If anything, monetary expansion has led to persistent deflation. Output gaps, full employment, Minsky moments, sustainable debt … concepts macro economists relied upon, have failed to provide accurate models as countries have blown past thresholds historically considered dangerous, without crashing.