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User Info	Fekete - Inflation and deflation all at the same time?; entered at 2007-12-01 12:44:13
Fatllama Posts: 613 Registered: 2007-09-02 In what respect, Charlie?	Joe-bob, I'm no expert, but what you describe is the hyper-inflationary scenario that a lot of people are banking on. If you believe this will happen, you ought to buy commodities and perhaps foreign currency now, yes? The alternative scenario that many on this board are coming to believe (and I am slowly working through myself) is that since fewer powerful people would benefit from such a devaluation of the USD we are going to get a deflationary spiral instead. Creditors will stop originating new loans (effectively shutting down the really important printing presses). Debt-backed assets will either lose their market or be sold at a loss. Sure, the Fed can lower interest rates, but in a recession it becomes more important to preserve capital than find new investment opportunities. 2007-12-01 12:44:13