Nearly 500 people have become billionaires over the course of the pandemic. Stock markets have risen inexorably while unemployment has increased and real wages have stagnated. Somehow property prices, which many believed would finally start to fall as economic activity slowed, have remained stable.

On the surface, the ebullience of asset markets makes little sense. Asset prices are supposed to reflect expectations of future returns, whether in the form of dividends, imputed rents, interest, or capital gains. The slowdown in economic activity combined with rising consumer prices should have led investors to adjust their expectations about variables like future profits. The reason this adjustment didn’t take place was that central banks didn’t let it.

They responded to the initial panic in financial markets by creating trillions of dollars worth of new money and using it to purchase assets from the private sector. These interventions left investors flush with cash and short of safe assets in which to invest — naturally, they went searching for higher returns by ploughing this money into riskier assets like tech and health care stocks, dodgy corporate bonds, and even cryptocurrencies and NFTs.