Surviving the Peace

29 Oct

The more we distance ourselves from the events of 2008 it has begun to feel like we survived the war (08/09) but have been completely at odds with how to survive the peace (QE ad infinitum). Maybe the reality is that the peace is not as peaceful as one might imagine. As everyone is well aware, our basic premise is that the creation of liquidity on a world wide basis by Central Banks would ultimately feed through to a devaluation of all currencies and a concurrent appreciation in the value of hard assets. Where has this thesis faltered, and ultimately will our thesis prove correct with only the path proving too difficult to assess? In other words, will we get there, but via a path that no one recognizes or anticipates. In a world of unproven Central Bank experiments, one might surmise that the way forward will look highly unlike anything we have witnessed before. We do know that the markets have once again become fixated with deflation, and as such the re-pricing of hard assets has re-commenced. In fact, it seems like there is no one that is even suggesting that we do not see deflation or at the very least dis-inflation.

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