We Will Have Deflation and Hyperinflation at the Same Time

from Grams Gold Deflationary forces in commodity prices have been dominant for several years. However, inflationary forces in bonds and stocks (equities) have been dominant for over six years. Based on the massive increase in global debt of over $50 Trillion since the 2008 crisis, the often stated intention of central banks to create inflation (they fear deflation in bonds and equities), and the need for government to inflate away their debts, we can be assured of more monetary and price inflation in our future.

But we can also be assured of more price deflation in our future – the consequence of asset bubbles, mal-investment, and the inevitable corrections. We should expect more inflation (thanks to “printing money” and massive debt increases) and more deflation as the bubbles collapse. Consequently, we will experience both inflation and deflation at the same time.

DEFLATIONARY TRENDS The Baltic Dry Index, which measures the cost of global maritime transport, is below crisis levels (2008/9, 2012 crisis), and falling. Picture Dr. Copper, the indicator of global economic activity and health, is flashing a similarly unhealthy signal; prices have created a huge descending triangle. And we all know the story with the oil prices. Picture Countries experiencing deflation and inflation: Further confirmation of deflation can be seen in the chart below which shows an increasing number of countries experiencing deflation. Continue Reading>>>

Sharing is caring!