We Are Already Hyper Inflating
By Gary Tanashian
Tuesday, 21 December 2010
ForEx jocks make or lose coin by guessing the direction of EUR/USD. Stock pick aces ride the wave and look good while trends remain in place. Commodity bulls can’t miss until the next miss is eventually driven home with a loud crash. It seems as if everybody is clinging to a conventional way of doing things, as if the world was not radically changed in and around 2001, and as if the old rules of the previous secular bull market still apply. They do not; it is the age of inflate-or-die, booms and busts.
As for deflation believers, while they may be diametrically opposed to the vast bullish apparatus that depends on ever increasing debt levels and currency depreciation, they are right there with their bull counterparts, generally playing to convention and playing by rules they think they know; following breadcrumbs laid out for them to follow as they issue dire projections about credit contraction and violent asset markdowns.
Let’s quiet the noise and look at the US Treasury bond market, which is arguably the most important market on earth, as it is intimately tied to the world’s reserve currency.