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Are you bullish even with all of the deflation talk?

Mark

Mark,

The deflation argument is little more than a fear tactic used to provide the necessary churn to unwind connected money’s leveraged short positions. This tactic has been used numerous times since 2001.

Deflation is the propensity to hoard cash. The same cash central planners are debasing through debt issuance and monetization. The message of the markets is clear - look at the U.S. dollar index trend. It's rolling over, but no one notices because of the fear.

Cash is king in deflation, but not all cash is created equal. It must be good cash without liability. This is why the founding fathers tied money issuance with gold and silver. They understood the social consequences of rampant currency debasement within Europe.

Anyone fearful of deflation as a bad environment for gold, I recommend holding wads of U.S. dollars, likely in the numerous failing banks within America. Gold is the still the world’s premiere currency despite the rehash of deflation argument in 2010. Preservation of purchasing power will be maintained not by holding U.S. dollars but rather gold by 2016.

It's tough, because the media makes these arguments sound real.

RY,
Eric