Last evening I read one of the best pieces in the blogosphere on the financial direction of the economy and what to do about it. If you haven't read anything from the blog FOFOA, you have been missing out. I found his site about two years ago and have frequently checked his posts to ensure that I am reading one of the deepest thinkers out there is predicting.
This post is not for the casual reader, nor is it a post that you can skim and get the gist of. It is one that you must pour over and over and steadily get through so that you savor each morsel. You may wonder if I agree with everything. The answer is, no, but overall I believe the direction is correct and that direction will be driven by the motivations outlined in this amazing post.
http://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html
Interestingly, since I stayed up way too late reading it last night, I am dragging, but am more convinced than ever that the overall outlook that I've had for the economy for this year is absolutely correct and it reaffirms that my longer term outlook also is on a solid foundation.
A REBUTTAL OR A WHITE FLAG?
Finally, if you don't believe me, I found this post this morning from Rick Ackerman, a committed Deflationist. He gushes about the FOFOA post and also suggests perhaps that he too is a HyperInflationist after all. I think this is the compelling part of this article, is that it addresses all of the concerns that Deflationists have and even suggests that many of the symptoms of deflation really are actual results of hyperinflationary processes. You must have your "I'll look at every asset in terms of relative value to gold (replace gold with hard assets like oil, silver, gas if you like.)" glasses on when reading the arguments. If you do, you too will be convinced that FOFOA is right.
http://www.zerohedge.com/article/finally-hyperinflation-argument-persuades
Now, I've read enough of FOFOA to know that he only advocates physical gold, this is where I differ with him. No matter, I think his overall direction is in agreement with mine and his ability to plod through the analysis and description is amazing. When I write articles half as long as his, I become bored with my own writing and can't ever tie the bow up as well as he does.
If it takes you a few sittings, do it. I think it would be worth your time. On that note, I am off to buy my store of freeze dried food!
Finally, I am curious to see what Mish says about this. Mish is a committed deflationist and is one of the resources I rely on to distill that perspective into clear points. I would wager that we'll see a post on this in the coming days from him. I'll link to it as soon as we see it.
GOATMUG
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