A review of the economic and investment implications of the CARES Act stimulus package. The U.S. and global economies have entered a historically new phase that is, for practical purposes, permanent. The debt and money creation are of an unprecedented scale, and will mark the beginning of an indefinite period of inflation and money debasement. The common bond/equity asset allocation models will be rendered obsolete, and the decades of statistics underpinning those models will now be discontinuous. At the current zero-level interest rates, there is no scenario in which bonds do not lose value, and the bond asset class will be more risky than equities. One of the most important elements in asset management in the coming decades will be finding inflation beneficiaries and businesses that thrive in such an environment.  Accompanying exhibits are available here.

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