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. . . and let’s refer to it periodically going forward. Because we’re about to enter a new era of the capitalist system. And no one can discern what the implications will be.

Afraid of deflation, the central banks have lowered interest rates to near zero. This has resulted in asset prices soaring.

Bond prices seemed to have peaked as of last year:

Stock prices are so high that they are bound to peak soon:

Prices move inversely to interest or dividend returns. So the dividend yield on stocks has fallen to about the lowest point in history, under 1.3%:

The yield on the benchmark ten-year bond is 1.3%. CD’s return less than 1%. More risky investments, like corporate bonds, return around 2%.

Here’s the point:

This is all unprecedented. Returns have been coming from capital gains, i.e., prices going higher and higher. Having gone so high relative to the growth of the economy and the growth of profits, the “higher and higher” will end. Bond prices might have peaked already, and stock prices figure to peak this year, maybe next. They went so high that they could fall, or at least stagnate, for a decade or more. I’ll predict that stock prices will be no higher in 2035 than they are today.

What will the financial world be like if there are no capital gains on stocks or bonds and the yields are just about nothing . . . around 1% while inflation runs at around 2%? Is it possible that no one will make money on financial investments for a whole historical period? Will gold soar as the alternative? It’s already pretty high. Bitcoin? Its price is insane. Housing? The ratio of the average wage to the average house price is already extended.

Where does capitalism go from here?