Darren Williams, European economist in the Global Economic Research division at AllianceBernstein has put some interesting (& alarming) flesh on the bones of the argument about relative inflation in asset & consumer prices.
In the 10 years 1997 to 2007 consumer prices in this country rose by an average of 1.6% a year, say 17% in total.
But the increase in stock market prices was 48%, in broad money 111%, in bank lending 155% and, in house prices, a whopping 197%.
In the USA, between 1921 & 1929, money supply rose by 51%, bank credit by 46% & the Dow Jones rose by more than 300%, while consumer prices fell by 4%.
