Part 8/10:
The 1970s serve as a cautionary tale, as high inflation during this period resulted in multiple stock market declines ranging from 30% to 50%. This historical precedent hints at the possibility that should inflation begin to rise again, U.S. stocks could similarly face downward momentum driven by increasing interest rates.
Indeed, current indicators suggest that inflation is on a downward trajectory, with prices of key commodities such as wheat, oil, and natural gas falling sharply. While certain asset classes, like real estate, may continue to rise, overall inflation appears to be slowing, creating fertile ground for a potential stock market melt-up reminiscent of the late 1920s and 1990s—not the scenarios seen in hyperinflationary environments such as Turkey or Venezuela.