– How can opposed investment choices (stock, bonds, cash) all drop at the same time?

Question

How can inflation be so high (cash dropping in value) yet stocks and bonds are both also dropping in value? Is it simply just that the whole economy is (and will be) so awful that there is nowhere with any upside?

In: 6

Answer 1

Value of cash goes down, which means people have to stretch the money they have further. That, in turn, means less people have disposable income, so less people are willing to invest. Less people willing to invest tanks investment values.