Since 1971. The world economic system became what I term financialism, where money is simply a debt instrument. The Treasury issues a debt note, in exchange for which they receive Fed Notes, and that debt obligation becomes the backing for more loans issued by the Fed to member banks. The Fed Notes handed to banks are then loaned too. Thus, debts in a single sector (if large enough) can crash the entire system.

The issue is, things that are tied to debt will go up first: housing, cars, etc. Stock inflation occurs because inflation forces people to speculate to stay ahead of the inflation rate.

To fix inflation when using a debt based currency, you’d need high interest rates (a high price of money), or you’d need the government to pay off debt which takes money out of circulation. Neither of these will happen as the politicians in power would cause serious short term pain. They all have an incentive to kick the can and hope the next guy is in power when it all falls apart.

What we are seeing now is the result of the price of money having been lower than the inflation rate for over 20 years. Effectively free money. This subtly skews the perception of risk, and therefore increases dollar velocity and drives inflation even higher.