iso, the inflation/deflation debate will grow in importance imo.
My wages are not signaling inflation. I doubt if anyone elses are either. We look around and discuss the accuracy or inaccuracy of inflation indexes, but this one is the most important one in my book, very accurate I think, and right in front of our noses. I would not be surprised if some of us, including myself, have to take wage cuts within the next few years. I can smell it coming. Guess that gives a hint I'm straddling the fence with a slight deflationist weighting.
Imo natural gas dumped last year due to a fall-off in industrial demand. I've criticized Simmons but his outfit did a good piece on this, some time ago. I don't believe it (industrial demand) has come back. Yes cooling and heating is important, but another factor is the sensitivity to the supply/demand curve. Some of these commodities are pretty darned sensitive, and if one piece of the pie falters, down she goes.
I don't know if I agree or disagree on the gold moving up in a deflationary environment. I've kept my eyes open for comments on this, from the experts. They don't seem to be that numerous, or I just have missed em. Prechter of course is a deflationist and his initial opinions I believe were that gold would suffer badly. Per a recent interview I gathered he was waffling. Maybe this years experience with gold has him wondering. Saville published a little piece recently and stated without equivocation that in his opinion gold would go down in a deflationary environment. He gave a reasonable explanation. Saville however doesn't believe deflation is a long term problem.
kitco.com
Fwiw if anyone has any other reputable links on the subject I'd sure like to see them. |
