NPR—and most media–miss a pretty big nuance in the rising-stock-prices story

27 Jul NPR—and most media–miss a pretty big nuance in the rising-stock-prices story

Posted July 27, 2025 from Seattle, WA.

“Stocks are surging,” reported NPR this morning. While the article contained a strong (and wise) caution that what goes up could perhaps go down, it listed only various strong economic indicators to explain why the Market might be going up: “Despite the concerns about the impact of tariffs, the economy has held up much better than many expected.”

One of it’s caveats was inflation, but it only mentioned one kind of inflation: “Although inflation ticked up to 2.7% in June from a year earlier, the economy has yet to see the spike in consumer prices that some economists had initially feared.”

 But consumer-price inflation is only one kind of inflation. It did not even mention the real possibility that asset-price inflation itself could be a factor in the rise in stock prices.

“As always, asset price inflation was portrayed in the media as a boom.” So wrote Christopher Leonard, the New York Times reporter in his book “Lords of Easy Money,” referring to an earlier period of sharp stock market gains.

It came as a surprise to me personally when I learned, while reading three books on the Fed’s easy money policies shown in the photo, that inflation can appear in the market for assets just as easily—or more easily perhaps—as it does in the market for commodities like corn or toothpaste: I had never even thought about it.

What this means is the stock-market-surge could be a bubble–or it could be some percentage bubble, meaning, it could be simply and/or partly asset inflation. This could be the case regardless of who happens to be president, Trump, Biden or anyone else.

It pays to keep this in mind.  Writing about asset inflation, Leonard discusses the ways it has impacted the US economy over the last half-century:

“When people look back on the 1970’s, they tend to talk about only one half of the disaster: the shocking inflation of consumer prices, for things like meat and gasoline.  But the Great Inflation was so destructive because it was actually two kinds of inflation that were intertwined, and which fed off each other. The other one was inflation of asset prices, a phenomenon that later became the most important feature of American economic life. Asset inflation was the force behind the dot-com crash of 2000, the housing market crash of 2008, and the unprecedented market crash of 2020, which was precipitated by the corona virus outbreak.”

Why does the media routinely forget about asset inflation?  There may be something conspiratorial about it, people have become too quick to dispense with this idea. But there is a more obvious reason the media has given up on reporting it: It is very hard to measure asset-inflation.  Commodity inflation is itself hard to measure, as a car in 2025 is not the same as a car in 1925, and what ever did happen to the price of a VCR? But asset inflation is even harder. GM stock for instance could lose a whole lot of value in a day if some other company suddenly gained ownership of a battery that could power a car for 900 miles—a myriad of things can change its value and be impossible to measure. Sometimes a boom is a boom, sometimes it’s a bubble and sometimes it’s part one and part the other.

We’ll have to figure it out ourselves or let time do that for us.