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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: YanivBA who wrote (54417)8/7/2006 6:23:58 PM
From: Tommaso  Read Replies (3) of 116555
 
It is very odd to me how people go on looking for the type of deflationary contraction that was possible when there was a gold standard--or even just the remains of an international (bank-to-bank) gold standard.

In a true deflation, you have people holding money and even literally burying it in jars in the back yard.

Who in the world wants to bury a fiat currency? (I mean, who wants to hold a paper currency as a store of value?) It's true that I have about a half-year's expenses in 4-week T-bills using TreasuryDirect. But these are redeemed every 4 weeks--and they even have a higher interest rate than 30-year Treasury bonds.

Long term treasury securities (anything over two years) are guaranteed certificates of inflationary confiscation. Even TIPS are at the mercy of whatever the government wants to define as the rate of inflation.
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