Why Real Estate is the Proper Hedge for the Current Inflationary Outlook
WRITTEN BY ZACH SCHENKER & GREG PEACOCK
There is a growing community of economists and prominent investors who think the world could emerge from the pandemic into an era of higher inflation. During the past month, underlying prices in Europe rose at their fastest pace in five years. In the United States, after the next $1.9trn stimulus plan passes, nearly 28% of all U.S. dollars in existence will have been created in the last 12 months. The story is similar in Canada where it is estimated that businesses and households are sitting on upwards of $170 billion in excess cash. Unlike the period following the 2008 financial crisis where lenders tightened credit restrictions, this time around, lenders have flooded the global economy with liquidity. Central banks have no intention of pumping the breaks anytime soon as the United States Federal Reserve says it wants to overshoot its 2% inflation target.