Investment Price Inflation
IPI is an investment price index reflecting the real change in the purchasing power of money through the prism of investment assets: stocks, real estate, bonds, and gold.
IPI vs CPI: Historical Dynamics, 1913–2026
Both indices (base 1959 = 100). Logarithmic scale.
Key Events on IPI Chart
1929 — Great Depression
IPI recorded a peak before the stock market crash, showing an extreme decoupling of asset prices from fundamental values.
1971 — End of Gold Standard
Beginning of the fiat money era. IPI begins accelerated growth, especially in the real estate sector.
2000 — Dot-com Bubble
Sharp jump in IPI due to tech sector stocks. The correction reduced the index by 40%+.
2008 — Global Financial Crisis
IPI warned of a housing bubble. The IPI / monetary base spread reached record levels.
2020 — Pandemic and QE
Unprecedented $4+ trillion issuance led to an IPI jump. Assets became more expensive faster than goods.
2024–2026 — Current Situation
IPI continues to grow amid high rates and Fed balance sheet reduction. A discrepancy with portfolio structures is observed.
What does IPI measure?
IPI is an investment price index in US dollars. It shows how much the 'investment basket' (stocks, real estate, bonds) is becoming more expensive, and thus how much it really costs an investor to buy risk today.
Who needs IPI?
Investors and CFOs living by 'cost of capital'. CPI measures consumption inflation, IPI measures asset entry inflation. The main question: is your wealth growing faster than assets are getting expensive?
How is it calculated?
Monthly chain Fisher price index. Basket of 4 blocks: Real Estate, Stocks (S&P 500), T-Bills & Cash, T-Bonds. Weights are determined by US household asset structure (Z.1).
IPI vs Monetary Base
In the long run, IPI is linked to the Net Monetary Base. Deviations are an indicator of the regime: the credit cycle takes IPI above the monetary anchor, crises and deleveraging take it below.
How to use IPI
It is a risk-regime indicator. An index below the monetary 'anchor' is a phase of stress and discounts. Significantly above is a phase of overheating and compression of risk premiums.
Forecast and Yield
Based on Net Monetary Base and rate forecasts, an IPI scenario can be built and implied equity returns calculated. A tool for planning and stress tests.