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Count on Robert Shiller, the author of Irrational Exuberance and the winner of the Nobel prize in economics in 2013, to rain on the Dow 20,000 parade.

Hs latest piece–I read it on The Guardian, one of my favorite sources these days for news on U.S. politics and the economy, but it has been widely syndicated on the Internet–boils down to this very straightforward advice: When counting your market returns, don’t forget inflation.

In inflation adjusted terms, he calculates, the Dow is up only 19% as of January 19, 2017. That’s a 19% gain after inflation in seventeen years. (In passing Shiller notes that the Case-Shiller Index of US house prices, which he co-authored with Karl Case, is still 16% below its 2006 peak in inflation adjusted terms)

Shiller’s long-term point is that the U.S. Federal Reserve runs an inflationary monetary policy. In normal times its inflation target is 2%. So all prices, and that includes the prices of financial assets such as stocks, should go up about 22% per decade just from inflation. In the long-term the Federal Reserve like all the world’s central banks debases the value of its currency to produce this inflation. Why do they do that? Because rising asset values, rising home values, rising paychecks in nominal terms–that is without adjustment for inflation–make people, including politicians, feel good. Way back in 1928 Irving Fisher called this fixation on nominal prices the money illusion.

Shiller’s observation on the real, inflation adjusted value of the Dow, is important not just looking backward, however. If fundamental economics still works, we’re headed for a period of above 2% inflation as an economy already near full employment meets a big stimulative tax cut (or cuts), a big Federal deficit (from an increase in military spending among other items) and a big stimulus package in the form of a $1 trillion infrastructure program.

That’s a recipe for inflation above the Federal Reserve’s 2% target. A Janet Yellen Fed will be inclined to fight a rise in inflation by raising interest rates, but Yellen’s term as Fed chair runs only until February 2018. (Although her term on the Fed’s Board of Governors runs until 2024 if she decides to stick around.) Stanley Fischer’s term as vice-chair runs until June 2018 (although his term on the Board of Governors lasts until 2020.) The Fed’s seven-member Board of Governors has had two vacancies since 2014 because the Senate refused to even hold hearings on President Obama’s two nominees. (Republican Senator Richard Shelby of Mississippi was the big obstacle.) That means that new President Donald Trump will be able to appoint two members to the Board of Governors immediately. If Yellen and Fischer were to resign in 2018 when their terms of chair and vice-chair expire, then President Trump would wind up with four of his appointees filling out the seven member Board of Governors. And he would have appointed both the Fed chair and vice-chair.

Trump has already made his displeasure known about Yellen’s push to raise interest rates to damp inflation. I can’t imagine that a Trump-appointed majority on the Fed Board of Governors would push hard to raise interest rates to fight inflation. Especially since higher interest rates would likely slow the economy. Which would be a problem for a President that has promised to be the greatest job creator ever.

So it’s likely that we’re looking at an increase in inflation as a Yellen Fed fights inflation (and inflation expectations) and an even faster increase in inflation as a Trump Fed doesn’t fight inflation very hard.

What does that mean? Following Shiller’s logic we can expect a series of higher and higher nominal peaks in the stock market as a result of inflation pushing the price of financial assets higher and as a result of bond investors moving cash into equities in search of an investment that keeps up with inflation. (Sounds good for real estate and other real assets too.) We can also expect higher interest rates from the bond market if not from the Federal Reserve. Somewhere in here, as higher U.S. interest rates balance against higher deficits and higher inflation, we’ll find a stronger or weaker dollar.

Of course, in real terms–that is after considering inflation–the gains on stocks, real estate, and paychecks won’t look nearly as appetizing.

Irving Fisher’s classic book The Money Illusion is still a great read on how inflation and emotions work together. You can order it on Amazon for $7.35 in paperback or $1.99 in a Kindle edition. (See, not everything costs more than it used to.)