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Default Deflation Depression III~ Versus the Myth of the Salvation of Hyperinflation
Washington, Jefferson and Lincoln warned US about our greatest challenge today.
After all, they lived through the war inflation of the Continental and Greenback. Two of them lived to see the depression caused by inflation.
Yet many serious people today still believe hyperinflation will wipe out all debt and clean the slate for reset and rebooting the economy.
No wonder so many are loudly advertising gold and silver. Be careful!
Big4 are still short gold and silver.
Gold and silver are produced in many unstable areas, not an argument for investing in them for safety and security.
But the gold bug bites hard and for many does not let go, becoming a vampire wolfman religion.
Rather than get into just another angels on pinheads inflation/deflation argument, perhaps it really is all just about the timing.
We still see significantly more default-driven deflation and asset depression BEFORE any possible asset inflation. A reflex rally does not a bull market make.
Last year was the year of the Bull. This year is the year of the menacing Tiger. Next year may be the year of the destructive dragon of war.
5.7% Q4 GDP was a fiction of seasonal adjustments and inventories, not a lasting economic pickup. It may be revised down as was the 3+% revides down to 2.2%. Annual GDP fell 6% last year.
Bottom pickers bought on bad news all the way down until they ran out of money. We bought last March and did well on the bounce, but that game may be over. We continue to buy closely held dividend discounts with a Trailing Buy and Sell Stop discipline to enter, hold and exit.
Most people are sitting this one out.
