Message:

<p>[QUOTE=&quot;Rono, post: 825041, member: 6492&quot;]Great discussion folks and pretty much spot on.</p><p>&nbsp;</p><p>If we hit a deflationary situation, asset prices will fall across the board.&nbsp; We&#039;re seeing some of that now with real estate, some commodities, stocks off and on, etc.&nbsp; </p><p>&nbsp;</p><p>Supposedly, in a deflationary situation, you would want to own long bonds and cash - apparently so that you can take advantage of cheaper prices.&nbsp; </p><p>&nbsp;</p><p>However, things are never quite so simple.&nbsp; The Fed&#039;s been printing money 24/7/365 and injecting it into the economy via Quantitative Easing [read:&nbsp; dropping dollars from helicopters].&nbsp; This would normally equate to serious inflation but as was pointed out, the money isn&#039;t circulating because the big banks don&#039;t want to lend money at these interest rates.&nbsp; They&#039;d much rather keep it for themselves in the form of bonuses.&nbsp; </p><p>&nbsp;</p><p>So the economy contiues to slow down, unemployment stays high (underemployment is about 20%), consumer demand for much of everything is poor and therefore the demand side of the price equation is soft enough to depress prices.&nbsp; </p><p>&nbsp;</p><p>Will we see full blown deflation?&nbsp; Not unless the economy seriously worsens from here.&nbsp; Will we see inflation?&nbsp; I think so because I don&#039;t see where the Fed can withdraw the excess cash [read: exit strategy] without crashing the economy and if they don&#039;t, we&#039;re bound to sooner or later see inflation.</p><p>&nbsp;</p><p>What to do?&nbsp; I&#039;m just trying to cover my ass.&nbsp; I&#039;ve got gold and silver both real bullion and speculative investments, I&#039;ve got cash and cash in foreign currencies (loonies and &#039;roos), I&#039;ve got short term bonds, inflation protected bonds and intermediate corporate bonds, int&#039;l and emerging mkt bonds, int&#039;l stocks, and not a lot of US stocks and am actually double short the U.S. long bond with TBT.</p><p>&nbsp;</p><p>Will my strategy work?&nbsp; WTF do I know? I hope so and would rather times be prosperous and people had jobs.</p><p>&nbsp;</p><p>peace,</p><p>&nbsp;</p><p>rono[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in