Russell Napier: “We Are On The Eve Of A Deflationary Shock “

Saturday, November 30, 2013
By Paul Martin

by Tyler Durden
ZeroHedge.com
11/30/2013

“We are on the eve of a deflationary shock which will likely reduce equity valuations from very high to very low levels…. Each investor must decide for themselves just how close to midnight they want to leave this particular party. The advice of Solid Ground is leave now as it is increasingly likely that one event will be the catalyst to very rapidly change inflationary into deflationary expectations. Indeed, when key prices are already falling across the globe, one should expect one key major credit event to occur. So perhaps it is global deflationary forces creating a bankruptcy event, somewhere in the world, that is the catalyst for a sudden change in inflationary expectations in the developed world. It can all happen very quickly; and it is dangerous to stay at an equity party driven by disinflation when it can spill so rapidly into deflation. Across the world today we see falling commodity prices and, primarily due to the weak yen, falling manufactured-goods prices. When there is plenty of leverage in the system and any key price starts to decline then a credit event and a sudden change in inflationary expectations are much more possible than the consensus believes. So watch the TIPS, BAA bond spreads and copper if you must, but this analyst prefers to observe the party from outside.… Each investor must decide for themselves just how close to midnight they want to leave this particular party.”

The Rest…HERE

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