Inflation/Deflation Face-Off: Harry Dent vs. James Rickards

June 18, 2012 By 10 Comments

We have previously discussed extensively the Causes & Results of Hyper-inflation, which is not inflation on steroids but rather a CURRENCY EVENT triggered by a collapse of CONFIDENCE in the fiat currency, nearly always occurring as a result of bureaucrats’ responses to a massive deflationary episode.

For those interested interested in hearing both sides of the inflation/deflation debate, Jim Rickards has debated Harry Dent on the topic and whether we face massive deflation, or a hyper-inflationary collapse. 


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Comments

  1. Avatar of 4 oz 4 oz says:
    June 18, 2012 at 11:43 PM
    mmkay……so it is allergy season and antihistamines can try my
    patience…..so it’s prob just me…but I took nothing of value from this
    display from these three conceited peacocks.
  2. Avatar of UKPSYCHO UKPSYCHO says:
    June 19, 2012 at 3:03 AM

    very interesting.. kind of universally agreed that deflation is the driving force.. and debating how the fed will continue to react to that environment of deflation. I think historical evidence would indicate that the inflationary big hose of money printing will be used to tame the deflationary environment. My tuppence worth is.. buying time is the primary driver for the fed.. printing will be done hyper reluctantly … almost trying to tease a broken market into standing on it’s own 2 feet. The assumption is a tight rope can be walked between inflation and deflation which would avoid the terrible consequences of both scenario’s. I don’t know anywhere near enough to be judgemental on the success or failure of the strategy, but i do know it is not without risk and may be good for getting past the elections and then some… However falling from the tight rope any day now would not make me blink. The quality of information the fed is given by central banks from any country is key here.. So again not much hope for the lies of the lying toads who lied to the liars that lied to the biggest liars.

  3. Avatar of 2 OZ. 2 OZ. says:
    June 19, 2012 at 5:22 AM

    The stage is set. Deflation usually comes before hyper inflation (not standard inflation). With near zero interest rates, IMO, prices will continue to fall in commodities until deflation (or at the least stagflation) takes hold. Sounds good until the company you work for begins to decrease your pay but you house/car payment remains the same. This is a dangerous trend and the FED can’t let it go on too long. As the debt builds and the economy deflates to the point of near collapse, THEY WILL PRINT and raise the interest rate to try to inflate their way out of debt. History shows this usually results in hyper inflation.

    Maybe. maybe not we’ll see. I think we’re kind of in the stagflation phase. These zero interest rates have not really had a booming effect on the housing industry and the FED don’t understand why millions of people are not buying houses. They are broke and can’t save as their pay has increased little to none over the past several years. The ZIRP isn’t saver friendly. If you can’t save for a down payment, you can’t buy a house, if you can’t buy, the housing prices continue to fall. If they continue to fall, it hurts the economy as more people go under water. You get the picture. It’s almost pointless to argue the “deflation/inflation thing. Both will probably happen. Who knows, just my thought on the subject.

  4. Avatar of Gina Gina says:
    June 19, 2012 at 5:48 AM

    Inflation vs Deflation argument again?   It depends upon the measuring stick.  If using FRN’s, then it is inflationary, as they keep printing / digitizing more debt notes and increasing the money supply.  Even though it is contained currently within the top tier between the banks and the gov’t, it is still a monetary increase.  Assets that were floated with credit stimulus (housing, cars, stocks) will deflate as the credit bust occurs.  Those assets /commodities that were not stimulated with credit (food, gas, utilities) will inflate as monetary “printing” occurs.  Stagflation.

    In terms of gold, prices of goods and commodities are falling.  This is deflationary.  And, is natural in a sound money system with increased efficiencies in the production cycle.

  5. Avatar of silverwulf silverwulf says:
    June 19, 2012 at 6:22 AM

    4 oz June 18, 2012 at 11:43 PM

    mmkay……so it is allergy season and antihistamines can try my patience…..so it’s prob just me…but I took nothing of value from this display from these three conceited peacocks
     
    Conceited or not, i kinda like the smell of peacock roasting in the oven and look forward to it ;)
  6. Avatar of silverbullion silverbullion says:
    June 19, 2012 at 7:30 AM

    I am of the opinion that we will see a very short period of deflation which will be followed by rapid hyper-inflation.

  7. Avatar of hunkered_down hunkered_down says:
    June 19, 2012 at 9:56 AM
    silverbullion said:

    I am of the opinion that we will see a very short
    period of deflation which will be followed by rapid hyper-inflation.

    We will see both.  The big question is which one we see first.   And remember, the ‘Wealth‘ in the FIRE economy has already been hyper-inflated.  It is in serious deflation here and now.   That is what all the money printing is trying to protect.  The money printing is aimed at propping up values in the FIRE economy.   If that ‘Wealth‘ gets scared and tries to hide in the physical production and consumption economy, you WILL see hyper-inflation in CPI prices very quickly.


  8. Avatar of ich1baN ich1baN says:
    June 19, 2012 at 10:32 AM

    Well.. Doug Casey seems to agree with you SB. I am under the opinion that we will have a Great Depression 2.0 and asset prices will have to come down but some countries will try to escape it through the printing press (possibly the US) and that is when you see precious metals rise to meteoric prices.

  9. Avatar of AGXIIK AGXIIK says:
    June 19, 2012 at 11:05 AM

    Those with cash will be able to buy assets at lower prices including, it seems, precious metals and real estate.  That is a deflationary spiral and we appear to be in that phase. Stocking up on items important to our basic lives is wise in this time period.   As the supply of precious metals and other commodities constrict, those prices will inflate.   The prices will increase rapidly aided by the  advent of even greater currency printing done by central banks to curb the depressions in the various world economies.

    On a side note,  3/4 of the world’s supply of platinum is in constriction in South Africa.  That metal is vital to the industrial base.  It could be a bellwether to precious metal prices due to its locational scarcity.  It should be jumping in price but is not going up any more than the other PMs.  That bears watching. 

  10. Avatar of Marchas45 Marchas45 says:
    June 19, 2012 at 5:03 PM

    What a waste of time. Move Along.

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