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I am beginning to think I may have been wrong in my assessment that the stock market and asset prices will continue to rise unabated as owners of massive piles of cash on balance sheets and in bank accounts look for assets to buy.

While there may still be a shortage of shares of stock, a few other asset classes seem to not only have peaked, but actually to have stalled or even fallen.

Vintage Cars

...The asset class of beautiful machines is suffering. These assets range from a rare 1962 Ferrari 250 GTO Berlinetta, which sold for $38.1 million with impeccable timing in August 2014 before the peak, to American muscle cars that can be acquired for a few thousand bucks.

According to the Hagerty Market Index, prices of vintage automobiles that sold at private sales and at auctions fell 3% from a month ago, are down 7% for the year, and are down 17% from the all-time high in August 2015. This 17% drop from the peak is worse than the 16% drop from peak-to-bottom during the Financial Crisis.

The index in the January report, at 154.33, has now two declining years in a row under its belt...

Commercial Real Estate

While commercial real estate outlook remains strong in 2018, leading economist predicts that prices will be at a standstill.

Commercial prices will plateau and may fall in large markets, but secondary markets will experience sustained demand and stable real estate prices, according to Lawrence Yun, National Association of Realtors® chief economist...

Classic and Collector Cars do not represent a major investment asset class, so significant declines should have little to no effect on the rest of the economy. There are many factors at play in the automobile market, so I am not really that surprised that vintage cars are becoming less valuable.

However, Commercial Real Estate represents a large investment class, which many large insurance companies, along with retirees and income investors, rely upon to generate regular income - along with expected price stability and/or appreciation over time.

I am going to have to re-assess my expectation that price inflation will spread through all asset classes as more and more cash "escapes into the wild."

As interest rates rise and bond prices fall, I am becoming concerned that existing weakness in commercial real estate will continue, perhaps even spreading to other income asset classes.

It is becoming evident to me that the era of simultaneous price appreciation across all asset classes may be dead.

Unless, of course, the central banks decide to start buying commercial real estate or commercial mortgage-backed securities. I doubt that any of the primary dealer banks are as exposed to real estate price fluctuations as they were in 2008.

I'm pretty sure that even the most liberal and asset-hungry central bankers are unlikely to get into buying up classic cars.

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