For a lot of investors trying to read the economic tea leaves, comparisons between the current environment and the stagflation pressure cooker of the 1970s might seem like a stretch. But if you ask Stephen Johnston, the similarity is definitely there.
“Back then, you had high interest rates and a very high inflation rate, which meant effectively you had negative real rates,” said Johnston, the director of Veripath Partners, a Canadian firm specializing in row-crop farmland investment. “Now today, you have low inflation rates, but you have even lower interest rates. So once again, we’re seeing negative real rates.”