The responses in Europe and the U.S. to slow growth/debt/austerity seem to foster a belief that while deflation is a possibility, monetary inflation can triumph and solve the problems. Commentary from many sources on the recent FED actions seems to be looking for a way to use that monetary stimulus and profit from it.
An article this weekend in the NYT is illustrative of the approach being taken:
It is true that inflation, whether it be general or targeted in terms of the various bubbles has served to keep the wheels rolling. The Big Stakes that I am referring to are simply; will Inflation work again, or will deflation take over. How one treats their life and how investments and assets are handled will become much more important than it has at any time since the 1930’s. If you go to cash and inflation wins, you lose, if you buy assets and deflation wins, you lose.
This week we will lay out some big picture facts and ideas and wind up the week with a look at our Marketocracy tracking funds asset allocation snapshots at various points during the past year and a chart of quarterly portfolio performance on that same vehicle over the past 11 years.
In the meantime depending on who you listen to, the markets are tired or are backing off after the exuberance of correctly anticipating the recent FED action. The points outlined in our September 19th post are still valid.