Quantitative easing by the Fed increased the money supply substantially between 2009 and 2015. Over the coming years the result will be inflation. The government routinely prints money to cover its deficit spending. Government debt already exceeds national income. Inflation will ease the government debt burden of paying creditors.
After 20 years of 5% inflation, a $3 Big Mac will cost nearly $8. Making a $1 bond payment will cost only 38 cents. Asset prices will have to rise to keep up with inflation. Starting at 12,000 in 2012 the Dow Jones average will have to reach 31,000 in 2032 to have the same purchasing power. Remember that new “milestones” for stock prices may only keep up with inflation.