DEFLATION’S COMING, Says Gary Shilling, And It’s Going To Clobber The Stock Market
Why deflation? For starters, the Fed has been giving money away for free for two years now, but it hasn’t done any good…
Aug. 12, 2010
All through the market rally and budding economic recovery of the past 18 months, most people concluded that the crisis was over and it was time to start worrying about inflation again. But strategist Gary Shilling of A. Gary Shilling & Co. stuck by his guns:
It was DEFLATION we needed to worry about, Gary said. And it was BONDS, not stocks, that investors should be buying.
Well, Gary’s bearishness on the stock market caused him to miss a nice run, but he has been dead right about bonds. And he has also been right about the potential for deflation–as evidenced by the recent Consumer Price Index numbers and the fact that most other strategists have come to agree with him.
So what’s Gary’s current outlook?