High equity valuations fall slowly when the surprise is inflation and quickly when it is deflation: deflation/earnings collapse threatens solvency and flips valuations rapidly (as in March 2009 when it was unclear GE had any equity), whereas inflationary bear markets (1966-82, 1900-1920) grind down slowly via higher interest rates and lower valuations while nominal earnings still grow.
causalpending
Speaker
Russell NapierEvidence Quote
“why does the equity market come down? Well it's higher interest rates and lower valuations and that's a different type of bare market. It was a constant battle against inflation”
Created: 6/18/2026, 1:59:14 PM
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