On one hand, the deflationists are claiming that given the extremely high debt levels in the West, further inflation is impossible. On the other side of the argument, many proponents of inflation are calling for Zimbabwe style hyperinflation. In this business, everyone is entitled to their opinion; however it is my contention that we will get neither deflation nor hyperinflation. If my assessment is correct, once business activity picks up, our world will have to deal with high inflation.

Although I have great sympathy for the deflation crowd, given the reckless attitude of the central bankers and their ability to create debt-based money, I do not believe deflation (contraction in the supply of money and total debt) is very likely.

For sure, in this post-bubble environment, American consumer debt continues to contract, but this is being more than offset by the expansion in federal debt. Over the past year alone, federal debt

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This post is a guest contribution by Puru Saxena*, founder of Hong Kong-based Puru Saxena Wealth Management.

On one hand, the deflationists are claiming that given the extremely high debt levels in the West, further inflation is impossible. On the other side of the argument, many proponents of inflation are calling for Zimbabwe style hyperinflation. In this business, everyone is entitled to their opinion; however it is my contention that we will get neither deflation nor hyperinflation. If my assessment is correct, once business activity picks up, our world will have to deal with high inflation.

Although I have great sympathy for the deflation crowd, given the reckless attitude of the central bankers and their ability to create debt-based money, I do not believe deflation (contraction in the supply of money and total debt) is very likely.

For sure, in this post-bubble environment, American consumer debt continues

...

This analysis from Dr. Marc Faber is adapted from our exclusive webcast Global Investing Outlook, which originally aired in early September. Dr. Faber, based in Hong Kong, is a prominent international investor and a member of the influential Barronrsquo;s Roundtable. I would argue that the weaker the economy is, the more fiscal stimulus will be applied and the more money printing will take place under Fed Chairman Mr. Bernanke, who is historyrsquo;s greatest money printer. As a government, you can print money, increase your debt and put everything on the governmentrsquo;s balance sheet, but it is unlikely to help the typical household in the United States. It may help Wall Street and it may help some asset markets, but not the American standard of living. If money printing would make countries rich, Zimbabwe would be the richest country in the world. If you pursue a monetary policy aimed at driving down and keeping interest ...

This analysis from Dr. Marc Faber is adapted from our exclusive webcast Global Investing Outlook, which originally aired in early September. Dr. Faber, based in Hong Kong, is a prominent international investor and a member of the influential Barronrsquo;s Roundtable. I would argue that the weaker the economy is, the more fiscal stimulus will be applied and the more money printing will take place under Fed Chairman Mr. Bernanke, who is historyrsquo;s greatest money printer. As a government, you can print money, increase your debt and put everything on the governmentrsquo;s balance sheet, but it is unlikely to help the typical household in the United States. It may help Wall Street and it may help some asset markets, but not the American standard of living. If money printing would make countries rich, Zimbabwe would be the richest country in the world. If you pursue a monetary policy aimed at driving down and keeping interest ...

The trouble with being a contrarian is that you can never be quite contrarian enough.

We began having doubts about the ‘feds inflate… gold soars’ hypothesis last year. It was too easy… too obvious. And if it were that easy to inflate a nation’s currency, how come the Japanese couldn’t get the hang of it in the ‘90s?

So, we moved towards a contrarian position – inflation, yes… but not for a while. And gold? Well, we are in it for the long run. In the short run, anything could happen.

To clarify our view on gold, the Daily Reckoning is not bearish on the metal. It is not bullish on the metal either. It is buggish. We are gold bugs. In the long run, gold will retain its value. Since that’s all we ask of it, we are always satisfied. Even if it is down in the short

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A few years ago I started commenting on the hyperinflation of Zimbabwe. Back in February, Zimbabwe started using US Dollars as the common transactional currency. This reminds me of how markets have over time usually picked a currency to use, in history the choice was usually gold and or silver. Interestingly, the Zimbabwe economy is on its way back to recovery with items on store shelves once again as you will see in this video. What the market place of Zimbabwe seems to have missed, is that the US is doing to its dollar exactly what the Reserve Bank of Zimbabwe did to its own currency. http://themessthatgreenspanmade.blogspot.com/2009/09/shopping-in-zimbabwe.html

I've finally gotten around to looking more closely at the World Economic Forum's annual Global Competitiveness Report, released last week. The report ranks 133 countries on the basis of 12 measures of an economy's competitiveness: institutions, infrastructure, macroeconomic stability, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market sophistication, technological readiness, market size, business sophistication and innovation.

Russia's overall rank dropped from 51 to 63, but as the country highlights discussion makes clear, this overall rank masks a more telling underlying story:

Russia falls 12 places this year to 63rd, the only BRIC economy

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“I’m Brazilian. I have gold. And I’ve just arrived from Rio richer than anyone…” Thus sang one of the characters in an operetta by Jacques Offenbach. But that was in the mid-19 th century. But hey… what goes around…

Guess what happened last year? According to a study from Boston Consulting Group, the only area of the world that got richer last year was Latin America… led by Brazil!

The rest of the world got poorer. By 11%, according to BCG. Down in the rum and sun zone, on the other hand, they got 3% richer.

So maybe our investments in South and Central America will turn out all right after all.

Meanwhile, back in the developed world… what’s going on? There are two main schools of thought. Ours. And theirs.

Who’s right? You decide.

They say – the crisis is over. We can thank our lucky stars – and the feds.

Now, we’re getting back

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The global recession claims another victim - the United States is no longer the worlds most competitive economy. Switzerland, a beacon of relative stability during the past 18 months of worldwide economic turmoil, toppled the topsy-turvy U.S. from the No. 1 spot in the latest update of quot;The Global Competitiveness Reportquot; from the World Economic Forum. The WEF uses a wide range of metrics to measure competitiveness, which it defines as quot;the set of institutions, policies and factors that determine the level of productivity of a countryquot; as a means to produce prosperity for its citizens. The U.S. was panned in the report for too-close relationships between government regulators and the private sector, and for quot;the perception that the government spends its resources wastefully.quot; Specifically mentioned were the massive additions to the federal deficit made by the Bush and Obama administrations, used to finance the Iraq war and economic stimulus. Singapore ranked third, with ...

The global recession claims another victim - the United States is no longer the worlds most competitive economy. Switzerland, a beacon of relative stability during the past 18 months of worldwide economic turmoil, toppled the topsy-turvy U.S. from the No. 1 spot in the latest update of quot;The Global Competitiveness Reportquot; from the World Economic Forum. The WEF uses a wide range of metrics to measure competitiveness, which it defines as quot;the set of institutions, policies and factors that determine the level of productivity of a countryquot; as a means to produce prosperity for its citizens. The U.S. was panned in the report for too-close relationships between government regulators and the private sector, and for quot;the perception that the government spends its resources wastefully.quot; Specifically mentioned were the massive additions to the federal deficit made by the Bush and Obama administrations, used to finance the Iraq war and economic stimulus. Singapore ranked third, with ...