The Meb Faber Show - Better Investing 200 Years of Markets in 60 Minutes (Deutsche Bank’s Jim Reid) | #618
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Feb 13, 2026 Jim Reid, Global Head of Macro Research at Deutsche Bank and author on long-term market history, walks through 200 years of data. He covers why cash and bonds can lose real wealth, how fiat money changed assets after 1971, the predictive power of valuation, and why global diversification and index weighting matter.
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Fiat Money Raised Long-Term Inflation Risk
- Since moving off gold, fiat money has led to higher inflation across many countries in the last 55 years.
- Authorities often expand money in crises, making inflation more likely than official forecasts.
Be Cautious With Low-Yield Bonds
- Avoid heavy long-term allocation to government bonds when yields are low and inflation risk is elevated.
- Prefer non-government credit or higher-yield markets to earn inflation protection and extra spread.
Nominal GDP Sets Equity Limits
- Global equity returns broadly track nominal GDP over long periods, so nominal GDP sets the 'speed limit' for equities.
- Authorities often push nominal GDP up via policy, altering return dynamics beyond productivity alone.
