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What's the best asset class for the next 1-5 years if we become deflationary?
- Thread starter ultimaonliner
- Start date
Gold and every other single commodity are now being hyped everywhere, your best bet is too stay clear of anything related to commodities, I think there is a bubble that is ready to deflate somewhat in commodities, I mentioned it last week and will mention it again, this is not the time to be running to commodities, its most likely a time to sell and take any profits you have any. I think there is at least a 15-25% correction waiting to occur in every commodity sooner than later.
Quote from ultimaonliner:
Which asset classes do you recommend being long for the next 1-5 years if the fed were to continue to lower the target rate to about 2% with consequent increases in the CPI followed by an overall possibly prolonged deflationary environment?
Did any asset classes do well in Japan's long deflationary period?
Though declining real estate values is a deflationary force, we may not see its impact the way many of us "understand". The Fed appears to be on a mission to inflate enough to steamroll deflation and not let it take hold. Of course, such a "cure" is likely to be worse than the "deflation disease".
A deflation would be painful, but it would also be temporary. We'd recover. BIG inflation will eventually destroy us all.
Quote from ultimaonliner:
Which asset classes do you recommend being long for the next 1-5 years if the fed were to continue to lower the target rate to about 2% with consequent increases in the CPI followed by an overall possibly prolonged deflationary environment?
Did any asset classes do well in Japan's long deflationary period?
You cannot have increases in the CPI and prolonged deflationary environment. I wonder why nobody spotted your contradiction. If inflation goes up this year it will stay high maybe beyond your 5 year target period.
The optimum action now is to raise rates by 0.25 bp otherwise the dollar will collapse and imported inflation will rise fast.
Unless the FED employer is not the American people but some Wall Street firm looking for liquidity injection.
Ron
Quote from ultimaonliner:
Which asset classes do you recommend being long for the next 1-5 years if the fed were to continue to lower the target rate to about 2% with consequent increases in the CPI followed by an overall possibly prolonged deflationary environment?
Did any asset classes do well in Japan's long deflationary period?
long term government bonds