Investors beware: the inflationists are winning

If we cast our minds back to a little more than a year ago, the investment world could be broadly divided into two groups. The first believed the West was destined for ‘Japanification’; that our economies were moribund and that, in time, we would consider ourselves fortunate to be living in an economy that ‘only’ suffered from mild deflation. In this scenario, the inexorable pressures of our ageing population, zombie businesses and highly indebted governments would pull government bond yields down further, perhaps even halving them from today’s levels. This, combined with disappointin...