The current debt and asset deflation will not lead to a Japanese 1990’s style deflationary period. It is more likely to lead to hyperinflation in the US, the UK and many other countries.
Most people find it very hard to fathom that the current asset deflation is a necessary precursor to hyperinflation. The consequences of the credit and housing bubbles of the last few years have been a financial system which is leveraged to the hilt and with a foundation of quicksand. Read the rest of this entry »