OOTD = Quote of the Day

Interesting quote but don’t discount the deleterious wealth effect on aggregate demand of a “so-called” asset class wiping out $2 trillion in wealth in the past year.  We have always maintained that the value expansion of an asset class with no parallel increase in production is inflationary.   The same holds for stock market valuations driven primarily by multiple expansions rather than profit generation.  

“Crypto space…is largely circular,” Yale University economist Gary Gorton and University of Michigan law professor Jeffery Zhang write in a forthcoming paper. “Once crypto banks obtain deposits from investors, these firms borrow, lend, and trade with themselves. They do not interact with firms connected to the real economy.” – WSJ