2010: Inflation Or Deflation?
With every deep-thinking pundit looking out at 2010 and predicting this
and that, the irony is that virtually all investment decisions will be
derivatives of one simple outcome: do we have inflation or deflation.
Numerous opinions have been set forth recently, each of which
presenting more convincing and detailed theses on why [stag/hyper]
[deflation/inflation] will be the dominant theme in the year to come,
accompanied by pretty charts and convoluted diagrams. And while one can
write books on all the political, economic and financial aspects that
will determine either outcome, we have decided to avoid that, and
instead would like to remind readers of a little-read paper by Brait
Capital Management, published in August of 2009, which conceptualizes
all the key themes in the inflation vs deflation debate.
Who will be right? With only a few hours in 2009 left, the new [de/in]flationary reality will be upon us shortly, and the answer to the question will become very apparent rather soon.