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Deflation Revisited
Now that the lemmings bought $64 in bond funds for every stock fund, gold, real estate and silver are down, and money market funds may legally refuse redemptions, what can we do to save ourselves?
Rich Cash
Not one man in a million understands deflation.
Rick Ackerman’s website had a lively conversation on inflation versus deflation today, with most people talking about 10% and higher cost of living increases in healthcare insurance and food.
All that glitters is not gold.
One way to see clearly through the fiat money illusion is to construct charts divided by gold.
When we do that, we see the dollar already inflated/lost -86% since 2001 with W’s drugs and guns government.
We see houses and stocks fell off a comparable amount in real terms.
Meanwhile debts for clunkers continue to compound and suck the life out of the economy.
Most returns since 2000, except bonds, were not real, but inflation illusion.
Now the worm has turned.
If we could believe the $14.3 Trillion debt ceiling was topping out as President 0 claims with budget cuts and cheaper healthcare, then long bonds might continue to be the excellent investment that outperformed most others since 1981 when we got 13% compounded on zero coupon Tigers.
After 20 years of disinflation, Hank Paulson and his accomplices in Congress, most subsequently dis-elected, deregulated and leveraged Wall Street leading to the first great fall in 2008.
The Hammer put his tax-deferred $480 Million sale of GS shares into T Bonds when he became Treasury Secretary and denied engineering a reverse bait and switch bailout or meeting with his firm Goldman.
http://blogs.reuters.com/felix-salmon/2009/10/20/the-secret-paulson-goldman-meeting/
