Summary
- The Covid-19 crisis is short-term deflationary, but the policy reaction will breed inflation
- Policy-makers are engaging in a form of Modern Monetary Theory
- For most countries, “turning Japanese” is a phase not a destination
- Shocks of historical magnitude change stock market leadership
- Inflation and yield curve steepening will make winners out of losers and losers out of winners
- Deflation-dogged Japan would benefit greatly from a turn in the cycle