No. of Recommendations: 29
FYI, the inflation spike is now completely over.
newyorkfed.org: Multivariate Core Trend InflationUS monetary inflation in the year to June was 2.06%, using a fairly sophisticated measure that strips out product-specific price changes and captures only the "general purpose" purchasing power of a dollar: only the component that is common to all items. That rate is now pretty much the same as the very steady figures for all rolling year periods ending from January 2017, up to November 2020 when it was 2.04%.
In a related note, annualized T-bill rates for various duration through to April next year are 4.9%/year - 5.3%/year. If monetary inflation remains at current rates, that's a real return of inflation plus 2.8% to 3.25%, which is historically pretty darned good. Prices are notoriously fickle, but as a central expectation, I expect a decidedly lower annualized rate from Berkshire stock in the next year or more.
In fact, even after tax the real return from lowly T-bills is now such that Berkshire could conceivably make a higher rate from cash interest in the next year than on the company's stock portfolio.
Jim
