First, inflation by policy and then, in noisy fashion, inflation hysteria in reaction to its effects. We are in that phase now.
The continuum however, includes cycles of the above intertwined with the relatively more rare, but hugely destructive deflationary 'events' that would visit once or twice a decade if the continuum is to remain intact.
Ah, but the inflationary continuum (ongoing inflation interrupted by and indeed validated by periodic bouts of deflationary meltdown) may not continue. This is where the longer term Treasury bond yields will be instructive, along with gold's ratio to all sorts of hard assets and resources.
Good stuff going on, because whether it is healthy or unhealthy, I call 'interesting' good. And as the Chinese would say right now, we 'live in interesting times' my friends.
As for the writer's ability to marry the analysis to portfolio performance well, the speculative portfolio is +2.5% for 2011 and +157% from baseline @ Sept. 28, 2008. Plenty of time left to sort things out for 2011.
NFTRH126 Out Now
http://www.biiwii.blogspot.com
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