Inflationary spirals take a long time to play out. The problem is by the time people realize we are in an inflationary spiral, it is too late. Rapid inflation can only be stopped by draconian measures at that time. There will be a time to get long commodities to protect against inflation, but not in 2009.
Is Inflation a Fact… Or Just an Opinion? Part I
Whenever everyone begins to think the same thing, you HAVE to question it, regardless of whether or not you personally believe it too. You never, and I repeat, NEVER make money by investing alongside the mob. So if the mob is screaming “inflation,” you have to be willing to re-consider the facts. It’s quite possible the mob is wrong (it usually is).
Is Inflation a Fact… Or Just an Opinion? Part II
To be blunt, either the market has lost any ability to discount the future what-so-ever, or the inflation story is not actually as simple as inflationists have claimed (money printing= inflation). I’m inclined to believe the latter, as indeed, nothing is ever quite what it seems or as simple as people make out.
Indeed, the dollar chart and commodity charts paint a very different picture from the common opinion that “the Fed is printing dollars ad infinitum and inflation is exploding higher.” Clearly, the market is trying to tell us something different. What is it?
