COVID-19 and the Wealth Bubble
Remarks from TPEX consultancy for decision makers.
A fundamental aspect of the present economy.
Written SH on 2024-01-08.
Tagged wealth
The transfer of wealth from the state to asset-owning individuals through COVID-19 is a fundamental aspect of the present economy. This wealth has sustained house prices and stock markets through the cost of living and inflation crises, and we expect this trend to continue through 2024.
Interest rate hikes delay asset acquisition purchases as bank returns, with limited risk, remain attractive. Therefore any reduction in interest rates immediately re-prioritizes asset acquisition. This wealth bubble will distort the economy as funds are transferred to asset acquisition rather than services, unless a choice to do otherwise occurs. Without such a choice, inequality will become further entrenched, with headline economic metrics increasingly disconnected from the common experience, housing prices up, stock market up, productivity unchanged.
Expect to hear, good news, even though your observation says differently. After all it’s likely an election year!
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