Inflation or deflation, it doesn't matter which. Stock prices are insane, and that will have to adjust. That adjustment will be the cause, not the effect--and given that this cause would be a huge evaporation of imaginary wealth, leaving a huge pool of unpaid debt, the consequences, not the cause, will be deflationary.
This might in turn lead to an inflationary period as the government tries to avoid the same mistakes as the 1930s--and especially if the dollar is finally perceived as America's export of last resort.
The major pressure on the dollar could well be oil prices, which could rise even as many other prices deflate. We went on paying the price and buying the oil when it was at $30 a barrel a good many years ago, and would do the same at $50 a barrel right now. When more than twice as many oil dollars depart our shores as are leaving right now, oil could go even higher in dollar terms, especially since the Asian economies are levelling out or even rising.
I wish I knew where true economic safety lies, but it is very hard to guess which of these things--as measured against one another--is likely to be most valuable. To return the inital point, however, stock certificates and their electronic equivalents are likely to give up a lot of value.
I guess if I owned an empty salt mine in Louisiana I would fill it with crude oil and wait, but I don't |
