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TB, most kind of assets are inflated at the moment. Do you expect asset inflation to continue?
I expect fiat currency debasement to escalate, especially so with the USD. As such, those assets viewed most desirable to hold through such a debasement and also viewed not to be currently overvalued will continue to escalate. Those viewed currently as being overvalued, but having substantial underlying worth will see a contraction initially before finding support and perhaps resuming the escalation.
Speaking in more concrete terms, most commodities will continue to appreciate this includes coal, iron, gold, coffee, etc. Housing due to the speculative nature of the last few years, high leveraging and rising rates will experience a contraction initially and then it depends on how bad the currency debasement gets. The worse the debasement, the more likely that housing will reach a plateau and perhaps even rise from there.
Thank you for providing the link, but I had read that post quite a few months ago. This post along with most of the deflationist-scenario postings have at their core a relatively stable currency. If I believed that to be the outlook for the USD, I would also be a deflationist. At my core I wish my outlook were wrong but repeated dispassionate reviews of the fundamentals of the USD, the slowing of the housing market with nothing to replace it, the fiddling in DC with no real concern evident, the massiveness of our indebtedness and its direction of movement, the direction that interest rates have to move on that debt, the structural deficits of the US budget, the trade imbalances, etc., etc keep leading me back to a very weak outlook. The commodities are telling us the story, but many do not want to believe what they see.
These are historic times the world's largest economy, largest consumer, largest debtor and reserve currency is imploding. I'm not certain where to hide out from it all, but gold miners, coal shippers and energy plays have done really well so far.
Timba |
