Gary Stevenson

really aggressively affect the price of assets because if interest rates fall a lot from 5% to 1% then I can't get any interest on my money anymore so suddenly other assets assets that give like real returns like rental property or like a profitable company sharing a profitable company suddenly they are worth so much more relative to money so this was basically

the theory which explained why is it that in that period after 2008 that the economy was really incredibly weak for well I mean you could argue 18 years because it's still weak now but let's say that the 10 years following 2008 the reason

The reason that was sort of given as to why stock markets did so well, despite the economy being so weak, was very simply interest rates are incredibly low.

So nobody wants to have money in a savings account.

Everybody wants to hold real assets instead because they give you much more return.

Okay, so that's your story, right?

That's your sort of simple story, blah, blah, blah.

This is why.

That's your sort of simple story.

This is why asset prices did well after 2008.

But then this crazy thing happened, right?

Which was we had COVID.

And initially, COVID also caused interest rates to fall.

Although in many cases, interest rates were already zero even before COVID.

But interest rates did fall further where they could during COVID.

And the asset prices, similarly to 2008, they fell initially and then they went up.

But then after COVID, this like really crazy thing happened, which was suddenly inflation spiked, and interest rates increased very, very quickly.

So interest rates before COVID were sort of depending on what industry you're looking at, you know, base rates close to zero, longer term interest rates, maybe one, one and a half percent, very quickly seeing base rates go up to 5%.

And long term interest rates go up to like 5%, or maybe more in many cases.

So in COVID,