West Central Alberta Coldest, wettest edge | I agree with markwright, I see deflation for quite a while before we ever return to inflation. Very few people are bold enough to say it or predict it since no one, not even the experts have ever seen anything except inflation in our lifetimes, so we are basing our future perceptions on that bias. But the end of an asset bubble can only be deflationary. And this bubble has been going on since WW2, will take a while to unwind all that excess. The civil service layoffs and wage rollbacks required to handle deficits are deflationary, unemployment, lack of borrowing, factory overcapacity, even demographics in the western world are all deflationary. Feds printing money is only going to lubricate the financial markets, not the true economy, just look at the discrepancy between the stock market and the real economy. Eventually all levels of Gov't will have to acknowledge that borrowing money for "stimulus" to make up for business and consumers who are no longer borrowing, is not sustainable. All of these gold bugs promising hyperinflation just can't seem to see the deflation, must be too many dropping prices blocking their view. I am not aware of any markets or commodities that are showing any sings of inflation, but I can find plenty that are still showing deflation in spite of this bounce that is being called a recovery.
That said, I still believe that farmland, and ag products are the best investment even in delfation. Just not if you finance land, machinery and inputs at todays prices, and sell your products as next seasons prices. People will still be eating after they have lost their mcmansion's, their bigscreen TV's, and their automobiles. Only business that has a better guarantee of customers no matter what the economy is an undertakers, but I'll stick to farming. |
Is inflaton coming?
