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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (48305)6/11/2012 10:57:53 PM
From: Spekulatius1 Recommendation   of 78676
 
I don't think the interest rate swaps (which are derivatives, but serve a real business purpose in most cases) have anything to do with where the interest rates will be in the future.

I don't quite buy in the bleak scenery- form e, the potential danger lies much more in inflation than in deflation. Part of this is my upbringing in Germany. Most Germans are hard wired to fear inflation much more so than deflation and so am I. Also from past inflationary episodes, I know that you can have a recession and high inflation at the same time, it is certainly not true that swamping the economy with printed currency will keep it going no matter what; in fact the risk doing just that is that citizens will loose all the confidence in the currency, at which point the game is over ad hyperinflation is unstoppable.

If you believe that your scenario comes to pass, you should short the market aggressively and the only stocks to hold would be consumer staples with pricing power, which would probably benefit from lower input costs.
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