The price-to-earnings ratio is a key measure of companies' values. It is equal to the costs of their stocks divided by their annual earnings. The price-to-earnings ratio of the S&P 500 is currently 26.0, or 62% higher than its 16.0 average over the past century. One of the main drivers of that increase is the Federal Reserve creating trillions of dollars in new money to fund government deficit spending, which can artificially inflate the prices of assets like stocks and real estate. This phenomenon is called "asset inflation," and it increases the wealth of those who already own assets, while making homes, stocks, and other investments less affordable for people with little wealth.