Inflation will hit just as the market collapse did. It will be things going along and BOOM! a rapid spiraling upward inflation out of now where. Just as fast as the property bubble came and went. Anyone sitting on cash will watch its purchasing power evaporate over the course of one or two years. Debt on the balance sheet guess what happens to it with hyper inflation. Companies with capital assets and who do a good part of business outside the US will do very well especially if they have cash-flow and debt they acquired and sitting on the balance sheet paying low rates.
Can't have a recovery without some inflation hyperinflation is unlikely again peolple talk about Zimbabwe I didn't know they were a reserve currency. I think the stock markets performance inflation adjusted will be piss poor. But it doesn't matter, if the public sees Dow 20k it won't matter to the media that price of bread is $10 and gas $6/ gallon it will matter to those who can see past the matrix .
Yes the price of bread will be 10 dollars but the stock price of the bread seller will go up along the way. 1000 dollars in cash that could buy 1000 loaves of bread today will only buy 100 loaves tomorrow 1000 dollar in the bread company today will be worth 10,000 dollars or more tomorrow. and if you have 1000 dollars of debt on your book today well tomorrow thanks to inflation it would be easy to pay off selling 10 dollar loaves. And the oven and bread making equipment + building will be worth much more thanks to inflation. So if stocks stay cheap or go down during high inflation you bet it would be time to load up even more. Ask the folks who loaded up on equity during the 70s bear market and see how they did compared to goldbugs who loaded up in gold as well. Equity is a productive asset, gold is not and has a negative cost to carry.
Well, most of the examples of hyperinflation that I could dig up were caused by one of two things. 1) Civil war or losing a war 2) Socialism And the fix was always one of two things 1) Free market capitalism 2) Pegging a currency to that of a capitalist nation.
Money is actually printed on a combination of Cotton and linen. So if you think hyperflation is coming, you might want to buy some cotton futures.
Rally is keeping on trucking as expected thanks to privatization of gains and socializing of losses. Continual crapping of the dollar. http://www.bloomberg.com/apps/news?pid=20601087&sid=arDMxXaxhW5M "Oct. 13 (Bloomberg) -- Mergers and acquisitions among U.S. companies are poised to rise, according to Goldman Sachs Group Inc., which said shares are cheap and executives have cash." Fixed Income folks gonna get nailed hard in the future. Dollar Loss Is S&P 500 Gain as Correlation Grows: Chart of Day http://www.bloomberg.com/apps/news?pid=20601039&sid=ap19tV54PWuE
About time... Tired of seeing people sitting on their duffs, collecting market-outperforming returns, just by owning so-called 'risk-free' bonds. We'll never see any growth in this country so long as the monetary system rewards savers excessively, compared to investors and risk takers.
"SAN FRANCISCO (MarketWatch) -- Repeat calls for a strong dollar by officials from Brussels to Paris to Washington have failed to stem the greenback's drop, as investors bet there's little chance central banks will intervene to buy up dollars. The dollar index (DXY ), which measures the U.S. dollar against a basket of six currencies, has lost 4% since Sept. 1, bringing its loss this year to nearly 7% and its level to a 14-month low. Against other units, such as the Canadian and Australian dollars, the greenback's slide has been even more dramatic. It's fallen about 6% since Sept. 1 against Canada's loonie, bringing both units close to the same level, and about 8% against the Aussie dollar."