Inflation Or Deflation?
Monday, February 3, 2014 at 3:00AM
[Positive Dennis] in Economics

My short, waggish answer to this question is yes. 

The only way you can have hyperinflation is if the government decides to do it. This seems unlikely, but not impossible. A far greater risk is deflation, which would cause the government to print too much money, which would cause inflation, which would cause the government to tighten, which would cause deflation. An endless cycle of chaos. This is my interpretation of the data. 

A lot of the "guys" are expecting 2014 to be the "year." I am not. I expect sideways movement. Governments will continue to prop things up. China just did by bailing out a bank that was due to default on $500 million. No one is saying where the money came from, but there are no other possibilities. Turkey raised their interest rates to 12%. This will solve the currency problem they have but will present problems for those who have loans that need to be rolled over. Russia is spending $400 million a day defending the ruble. Russia's reserves are better than most but are not infinite. 

Governments will continue to interfere with the market and will for the most part succeed. President Clinton will have to deal with this in 2017.

Ambrose Evans-Pierce is one of the economic writers I follow. His latest musings led to this blog post.

Article originally appeared on Prophecy Podcast (http://www.prophecypodcast.com/).
See website for complete article licensing information.