Deflation vs. Inflation

We've been going over this debate for months. It's the most important investment question of our time.

I haven't articulated it much. But the two camps are captured well by Mish for deflation and Toscano against deflation. They are both right. We are certainly in a deflationary situation right now, but the Fed printing presses are limitless. To be fair, Mish says no hyperinflation, while Rich says no deflationary spiral. So they can both be right in the unhappy middle: stagflation.

Do what you will. I am holding both gold and cash for either eventuality. Bonds are for fools.

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