Inflation or deflation?
Source: Wikipedia, Illustration of the Cineorama balloon simulation, at the 1900 Paris Exposition
Why does a society find it so tough to comprehend whether the future is inflationary or deflationary?
Inflation is when cash loses value and deflation is when cash has all the value. Now what’s losing value? Cash or gold? There is much more money following the same assets. Equities and commodities are where they were few years back. Gold is 30% from the psychological 1000 dollar level for more than 3 years now, agro commodities are still below multi decade resistances, and global equity fails to portray any crisis.
So should we ask again what’s losing value? Yes cash is, it’s more but has lesser purchasing value. Let’s ask another question. What is perceived more valuable, cash or non cash assets? We as a society are still giving cash more importance. Ask yourself, what do you desire more, a larger salary or larger number of gold biscuits. Yes, many of us still desire more cash.
Author: Domnita | Date: 22 December 2010 | Comments (0)
Tags: Agricultural Cycles, Cash Cycles, cycles, Deflation, Depression, Inflation
Categories: Forecasts, Time Triads
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