Today's Opening Belle is brought to you by our partners, Equos and Utrust.

Looking for a crypto exchange?

Give Equos a try (they've just released an exchange token, similar to BNB and FTT)...

...and exceeded $200M of daily volume, a new record, after increasing volumes by more than 40% in just a month, driven by their exchange token, $EQO πŸ‘‡

EQUOS is part of Diginex $EQOS. Find out more here.

AND the UK's FCA has just approved Digivault, which provides institutional investors with a solution that makes digital asset custody simple and secure.

Want to incorporate crypto payments into your business? Definitely use Utrust.

It's different this time

πŸ‘†πŸ‘† Supposedly the most expensive and dangerous four words in investing... πŸ‘†πŸ‘†

Inflationistas have provided us with plenty of examples over the past few months, but it's nothing new...

Inflation is here. Bond yields will have to increase. It's different this time

Just like it was every other time πŸ‘‡

Premium: The world is ending, oh hang on
What happens next if inflation peaks this month?

Why does this keep happening?

People are constantly making forecasts about the future, and the worst ones are consistently made when the predictor is right in the thick of the action.

This from March 2020 is a great example πŸ‘‡πŸ‘‡πŸ‘‡

This Time Really Is Different (Published 2020)
The pandemic is a transformative global event, requiring fresh thinking and a public generosity that has not been a hallmark of recent American life, our columnist says.

Here's an excerpt:

I am afraid that we may be barely grasping the transformative nature of the global calamity that is the novel coronavirus. It helps, a little, to think in meteorological terms. View it as a major hurricane β€” one that still appears to be gathering force.
Consider the storm’s scope.
Corporate earnings are falling, and broad sectors of the stock, oil and commodity markets have taken fierce punishment. With a decline in American stocks of more than 20 percent from their peak, the 11-year American bull market died on Wednesday.

It died a little bit more for a few days, and then came roaring back to life.

New bull market or continuation of the old bull market?

Nobody cares.

One thing the market has drilled into me is that everything is relative.

Take this current bond/inflation argument.

The 10Y yield is only 1.5%.

Headline U.S. inflation today printed at 5%.

For many, this is CRAZY!!! OMGZ!

In the worst cases, people see something like this and because it doesn't make sense, they think it's a trick.

It's manipulation, the Fed are out of control, financial repression, ponzi scheme etc.

Yes we are seeing some inflation over a period of months, but inflation is clearly trending lower over the longer timeframe (years & decades), and that's what matters...

The value of a 10 year bond is not determined by one or two high CPI readings.

In the 'life' of a 10 year bond there are ~120 CPI readings.

During that time, individual inflation prints will move higher and lower, but it's the average across the next 10 years that determine the fair yield.

Collectively, traders are making judgements on the most likely economic paths for the next 10 years in order to determine that value.

Yes, that is over-simplifying it a bit.

Either way, the trend is clear.

It's never different this time unless something changes...

So far, nothing drastic has changed.

There's been no technological revolution, no enormous investment, nothing to reset the scales...

So we return to the pre-Covid trend.

Back to the initial point about relativity.

Buy high, sell low is a terrible way to think about valuations.

This isn't your local cash & carry.

Assets should always be valued relative to each other.

In a low-rate environment, investors will actively seek out yield (and risk).

"Stocks and property are expensive, this isn't sustainable"

Not many would disagree, but where can investors find a better return?

If You Sell a House These Days, the Buyer Might Be a Pension Fund
Yield-chasing investors are snapping up single-family homes, competing with ordinary Americans and driving up prices.

Maybe it will be different at some point.

Maybe MMT-lite will change the future.

For now though, it's more of the same:

Asset prices πŸ“ˆ until proven otherwise.