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Inflationary Deflation Thunder Road Report December 2012

Inflationary Deflation Thunder Road Report December 2012

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Published by Gold Silver Worlds

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Published by: Gold Silver Worlds on Dec 10, 2012
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Thunder Road
INFLATIONARY DEFLATION:creating a new bubble in money
 Central banks versus the Long Wave
December 2012
Market Strategy
Paul Mylchreest 020 7107 8049 paulmylchreest@seymourpierce.com
Sue Munden 020 7107 8069 suemunden@seymourpierce.com
Industrial Goods & Services
Dr. Kevin Lapwood 020 7107 8337 kevinlapwood@seymourpierce.comCaroline de La Soujeole 020 7107 8089 carolinedelasoujeole@seymourpierce.com
Life Sciences
Dr Robin Campbell 020 7107 8030 robincampbell@seymourpierce.com
Metals & Mining
Asa Bridle 020 7107 8034 asabridle@seymourpierce.comMatthew McDonald 020 7107 8070 matthewmcdonald@seymourpierce.com
Oil & Gas
Sam Wahab 020 7107 8094 samwahab@seymourpierce.com
Sue Munden 020 7107 8069 suemunden@seymourpierce.com
Freddie George 020 7107 8037 freddiegeorge@seymourpierce.comKate Calvert 020 7107 8004 katecalvert@seymourpierce.com
Special Situations
Sue Munden 020 7107 8069 suemunden@seymourpierce.com
Software and Computer Services
Brendan D’Souza 020 7107 8099 brendandsouza@seymourpierce.com
Angelos Anastasiou 020 7107 8051 angelosanastasiou@seymourpierce.com
This is a marketing communication. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and isnot subject to any prohibition on dealing ahead of the dissemination of investment research.
INFLATIONARY DEFLATION: creating a new bubble inmoney
Excessive monetary stimulus and low interest rates create financialbubbles.
Central banks are creating the ultimate bubble in MONEYitself
, as they fight the downward leg in this Long Wave cycle.
First it was NASDAQ, then it was real estate and securitised debt, now it’s money
Jeff Kubina / Foter / CC BY-ND (and for front cover)
This is the biggest debt bubble in history. Each time DEFLATIONARYforces re-assert themselves, offsetting INFLATIONARY forces (monetarystimulus in some form) have to be correspondingly more aggressive tokeep systemic failure at bay. The
avoidance of a typical deflationaryresolution of this Long Wave is incubating a coming wave of inflation
.This will not be the conventional “demand pull” inflation understood bymost economists.The
end game is an inflationary/currency crisis, dislocation acrosscredit and derivative markets, and the transition to a new monetarysystem
, with a new reserve currency replacing the dollar. This makes goldand silver the “go-to” assets for capital preservation.
Strategically, we are far more bullish on equities versus bonds.
Tactically, equities face a volatile period - buffeted by alternating cycles ofdeflationary and re-flationary forces until they overcome bonds as theinflationary endgame unfolds.
In that scenario, equity investmentsshould (over time) be aligned with the growing share of realdisposable income directed towards essential expenditures, includingenergy, food/agriculture, personal & household care, mobiletelephony and defence (for governments).
The “Inflationary Deflation” paradox refers to the rise in price of almost everything in conventional money and simultaneous fall in terms of gold.
December 2012
Thunder Road Report
Paul Mylchreest
Market Strategy+44 (0) 20 7107 8049paulmylchreest@seymourpierce.com

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