Zeg hallo tegen deflatie
Posted: July 20th, 2010 | Author: Maarten Verheyen | Filed under: Federal Reserve, deflatie, obligaties | Tags: deflatie, quantitative easing, richard russell | 1 Comment »De legendarische Richard Russell blijft beleggers waarschuwen voor het zware onweer dat op komst is:
“Say hello to deflation. The signs of “too-low inflation” (Fed speak for deflation) are flashing everywhere, and the bond market is adjusting to discount deflation. This from Bloomberg – Treasury Two-Year Note Yields Tumble to a Record Low as Economy Weakens…
Russell Comment – We’re moving very close to actual deflation – the bond market is saying it. At this point the Fed is very nervous. Therefore, I expect the Fed to start big time printing (“quantitative easing”) very shortly.
This is what’s holding gold above 1000, and, so far, above 1100. The Bernanke Fed has a well-advertised formula for defeating deflation. The formula consists of printing more money, which is obviously inflationary. The massive creation of more money dilutes the purchasing power of the dollar. Frankly, the deflationary forces are hitting much faster than I thought they would. This must be what the stock market has been telling us. The stock market deflates first (as it has been doing), and the economy follows.”
Who ever Russell is, the man has not a clue of what Inflation and Deflation is and has probably never heard of the 3 cycles leading to Hyperinflation.
He’s clearly contradicting himself:”We’re moving very close to deflation and the FED (Authorities) will start printing big time. [the IMF is looking for $250 bn]!?
There are unfortuantely few people out there who understand what deflation, inflation and hyperinflation is. Each time Gold comes to a rest (it does traditionally during the Summer months) those Deflation cries wake up.
Having said this, out of the statement made above it is clear the author doesn’t understand that Hyperinflation is a monetary and not an economic event.