We all know that inflation is a monster, but just what sort of monster is it?
Websters Dictionary says, “Persistent expansion or increase in the general level of prices, usually caused by overissue of currency, and resulting in a reduced value of the currency.”
So what is inflation? Its the creation of to much currency pure and simple, and it will continue to show up all over the place as it sloshes around the globe looking for a home. (no pun intended) It could show up anywhere at anytime. As I write this I would say that it is appearing in the US stock market, housing in the UK, New Zealand and other western countries. But it can leave those in a flash as confidence dwindles. It’s when it flows into the basic elements like food and energy to a greater level that it will be truly crushing.
Many sophisticated investors believe we are in the middle of a bond bubble. It is believed that bonds are a safe haven but that is only true if that currency can be paid back and in most cases it can’t be and never will be. The bond market is an accident waiting to happen and a slow moving train wreck you don’t want to be on.
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