10 year US treasuries yielding almost the same as 10y TIPs, factoring in an annualized -0.04% of CPI deflation over the next 10 years http://www.bloomberg.com/apps/quote?ticker=USGGBE10:IND
Our problem is compounded by the fact that the we have a negative savings rate compared to the Japanese who have some of the highest savings rates in the world.
This guy on Bloomberg said a 1% increase in US savings means 1% contraction in GDP. Also, the Japanese had a 14% savingsrate when their markets crashed. Their savingsrate was down to <4% 10 years later as they used their savings as a cushion. Brutal future outlook going by these numbers.
1. Forecast the future (perhaps: USA in 2009-2019 will resemble Japan in 1990-2000) 2. Decide which speculation / investment strategies and vehicles are optimal for that forecasted future 3. Switch to these new optimal strategies and vehicles 4. Collect profits 5. Quit bitching
The fact is : when you are broke, there is no solution. Deflation : everyone has debt will go into default. Inflation : US has no saving to inflate the market. If US borrow money to inflate, debt load increase and the end result is broke and default too. There is only solutions that are hard to achieve. Increase productivity. Increase export. None can be done by government.