Tags: harry | shultz | deflation | hyperinflation

Schultz: Deflation Now, Hyperinflation Soon

By    |   Friday, 11 Jun 2010 09:26 AM

Deflation is the biggest worry now but it will turn into hyperinflation soon, says Harry Schultz, author of the successful International Harry Schultz Letter.

"We are poised at a heart-stopping moment in economic times,” Schultz writes.

“On one extreme side, the world is on the edge of massive deflation and depression. At the other extreme, hyperinflation.”

Schultz’ view: “Both these extremes are possible.”

Deflation is the issue now because money supply is actually declining, he says, according to a MarketWatch report.

“Hyperinflation seems impossible when there is not much inflation in most economies. But hyperinflation is a monetary event, not an economic one and will happen on an overnight basis, not via a general uptrend in inflation data."

The recent rise of gold prices to a new record high and the decline in most stock markets are ominous signs, Schultz says.

“This implies the unexpected hyper is pending, because if it were exclusively deflation ahead, gold action would be less buoyant.” He sees the precious metal ultimately reaching $6,000.

Schultz recommends that investors now devote 40-50 percent of their portfolio to gold stocks and bullion.

Many disagree with Schultz’ inflation worries after consumer prices fell 0.1 percent in April.

“I think what you are seeing is a continuation of a very soft trend,” Michael Feroli, chief U.S. economist at JPMorgan Chase, told The New York Times.

“And there is no evidence that it is about to turn around any time soon.”

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Deflation is the biggest worry now but it will turn into hyperinflation soon, says Harry Schultz, author of the successful International Harry Schultz Letter. We are poised at a heart-stopping moment in economic times, Schultz writes. On one extreme side, the world...
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2010-26-11
Friday, 11 Jun 2010 09:26 AM
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