Inflation/Deflation

This will be a subject talked about. Since the next few months trading depends on getting this right, much will be discussed. As we look at the latest gov figures today, (what part you can believe) we see that inflation did not rise as much as expected. This is deflation winning.

But do not be surprised with another "bailout" "stimulus" from the gov. deflation is much worse in the eyes of the feds than inflation. Problem is the deleveraging is going to take more capital than the feds will be able to pump into it.

So...tangibles will be falling as a result of this latest round. At what point are the feds going to stop pursuing the printing? Who knows.

For now the breather in tangibles should be looked at as a chance to get in. Also the breather in falling bonds should be looked at as a chance to get short.

Time will tell when deflation is defeated. With the credit markets imploding all around, my guess is deflation for longer than most expect.