> I suspect the stock market surge over the last year is mostly fake inflation gains.

It's not really possible to make 100% gains out of 5% inflation. Not every price increase is inflation!

The increase in the price of stocks isn't really inflation (except with respect to CPI) because 1 share of AAPL buys you far more CPI goods than 1 share of AAPL bought you 2 years ago. For it to be "inflation" and "entirely illusory" 1 AAPL share, while priced at $150 would have to only buy you as much a 1 AAPL share 2 years ago at $50.

That makes the increase in asset prices "ROI" not inflation.

What you're seeing is a massive increase in personal savings among Americans, recently at near all-time highs. [1] Combined with FINRA margin debt at near all-time highs due to the low-cost and broader availability of loans. [2] That's my theory anyways.

[1] https://fred.stlouisfed.org/series/PSAVERT

[2] https://www.advisorperspectives.com/dshort/updates/2021/08/1...

Do you really believe that inflation is only 5%? I don't. I see big price increases across the board.

BTW, what the shares of one company does means nothing in this discussion. What the S&P 500 does means something.

(1) well I don’t know what to tell you haha, inflation calculations are public. You can’t just say without citation that ehhh I feel like it’s not though shrug - this is actually something you can calculate! Please, do it, or cite some sources - ideally credible ones! You can’t just make giant claims like that without evidence. Of course certain contributors will be higher than the average weighting - like housing - but that’s how averages work.

(2) ok the same exact thing applies to SPY shares and doubly so when you include dividends. I mean AAPL is 7% of the S&P500 and 12% of the NASDAQ and so is fairly representative but your point is well taken.

Inflation is a tax on money earned in the past. Money earned in 2011 isn't as good 2021. You can't sit on it. If you actually spend it within a year the impact is barely noticeable.

There are two reasons why stock prices go up. Inflation raises revenue expectations. Lower interest rates raise the value of future cash flows. This is especially bad with land because it can absorb any additional money you get from lower interest rates. Low interest rates make your car cheap but not your house... It's a big problem.