The Damaging Effect of Emerging Market Monopoly Money on Common Stock Investing

William Smead submits:

In June of 2009, in a piece called "Monopoly Money," we argued that increasing the amount of money held in the bank of a Monopoly game will not affect the game unless the players are given more money at the beginning of the game or sometime during the game. For this reason, we felt that those investors (and they were numerous) who were avoiding US stocks out of inflation concerns were making a mistake at that time.

In October of 2010, core inflation came in at zero and stocks are higher. Unfortunately for most worldwide investors and asset allocators, another Monopoly game has been played in China. Ben Bernanke, Jim Chanos, David Barboza and Jason Zweig understand this and are explaining it to folks who are willing to listen.