Tuesday, May 19, 2009

Inflation, Not Eli Is Coming

"The road to hyperinflation starts with central banks printing money to finance government spending. But while they can print money, they can't create sustainable wealth. Contrary to what it wants us to believe, the Fed has no exit strategy. ... But the Fed may want inflation: If you don't want home prices to fall, try raising the price of everything else. Sophisticated investors can cope with inflation and credit, but using inflation to bail out debtors could increase the wealth gap. ... As the US tries to reflate the world economy, commodities and commodity-sensitive currencies will benefit. The less industrial use a commodity has, the more sensitive it is to monetary inflation. ... As inflation increases, China may need to allow its currency to appreciate. Currency isn't only a medium of exchange, but also a store of value. As more central banks are tempted to devalue their currencies, investors may want to take a diversified approach to cash", Axel Merk (AM) at Financial Planning, May 2009.

I agree with AM.

1 comment:

Anonymous said...

Never any good news for the people... ZB will inflate his way out... I'm sure he sees no other choice...