Inflation? What inflation? Stocks, gold, petroleum, etc. down

  It’s a Sea of Red on all the exchanges this week – stock market indexes, stocks, gold, silver, petroleum, ad infinitum. What’s going on? Well, it’s not inflation, that’s for sure.

Gloom and doomers can rejoice. At last their predictions have come true. Except for the part about hyperinflation. But that was a different type of gloom and doom.

IFO has no predictions. She is completely, um, at sea.

We’ll have our market reports for you after the close, but we just wanted to show this now.

Bizarro World Inflation; About that 2011 Hyperinflation Call …” In the article, there’s a great quote from our man, Mish, after he repeats, yet again, and shows figures for, his firm contention that we are in a deflationary economy and will be for the foreseeable future.

“It’s not that I am in love with the dollar. Indeed I am not. I like gold. Historically, gold does well in periods of deflation and periods of credit stress. I also point out that gold fell from $850 to $250 from 1980 to 2000 with inflation every step of the way. Gold is decidedly not a hedge against inflation in any practical sense.”

As many experts say, “When there’s blood in the streets, it’s time to buy.” We’re not sure about that, but here are three moves to consider:

Move 1. We are starting to examine a few stocks, just in case we want to buy something.
Move 2. Another option we sometimes choose when we’re in a mood to buy stock is to add to existing holdings. We’ve already vetted them, so there’s less work.
Move 3. Don’t do anything at all, just keep an eye on things.

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About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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2 Responses to Inflation? What inflation? Stocks, gold, petroleum, etc. down

  1. prepster411 says:

    There’s too much debt in the system -too many claims without the productive capacity to service those claims. Deflation, therefore, will be the fundamental mover in the markets, but money printing will be the ultimate political response, because the banks will demand it.

    • What an excellent, concise description of the problem. What the banks and pension funds don’t understand is that putting more money into the system won’t help. Only some combination of writing off or paying down the debt will get us out of this swamp.
      Not sure whether productive capacity increases can fix bubbles, though, and housing prices definitely bubbled.

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