HI Alex: Good post. I'm curious what you think of the reverse case scenario with deflation being the primary risk in the next few years. I already see the deflationary signs in commodities, housing sectors price reductions, the shipping cost of containers has dropped from 15k a container last year to now 4k from Shanghai to Los Angeles. Market bust, further deflation & unemployment rise is probably on the horizon, even though markets have been crazy recently.
Hi - sorry about a late reply... I think we'll have a temporary period of disinflation for the reasons you mentioned, but I don't think it'll turn into a self-reinforcing deflationary depression. During the 20th century, we had many inflations and hyperinflations but very few examples of deflation, and virtually none that have lasted over 12 months. In a different articles I tried to articulate one perspective that suggests that inflation will be with us for many years to come and might even accelerate. In many cases through history, these long periods did include several waves of acceleration then deceleration, but inflation prevailed. Another dynamic is that deflation actually exacerbates next inflationary waves by causing shortages of resources. Having said all this, the outcome is never entirely predictable.
Would be good to hear your thoughts on which online platform offers the best tools for a DIY approach. Especially for people new to this who want to practice first with relatively small funds. Would be interesting to see if others would like to join a Discord and learn the process together?
HI Alex: Good post. I'm curious what you think of the reverse case scenario with deflation being the primary risk in the next few years. I already see the deflationary signs in commodities, housing sectors price reductions, the shipping cost of containers has dropped from 15k a container last year to now 4k from Shanghai to Los Angeles. Market bust, further deflation & unemployment rise is probably on the horizon, even though markets have been crazy recently.
Alex Gurevich On Why A Deflationary Depression Is The Real Concern makes a strong case https://www.youtube.com/watch?v=kgbNt5Yfp2U
https://twitter.com/TOzgokmen also makes several arguments for 2023 deflation issues being of concern.
But like you said could to hedge regardless with the investment strategy you suggested against inflation/deflation pressure.
Thanks
Hi - sorry about a late reply... I think we'll have a temporary period of disinflation for the reasons you mentioned, but I don't think it'll turn into a self-reinforcing deflationary depression. During the 20th century, we had many inflations and hyperinflations but very few examples of deflation, and virtually none that have lasted over 12 months. In a different articles I tried to articulate one perspective that suggests that inflation will be with us for many years to come and might even accelerate. In many cases through history, these long periods did include several waves of acceleration then deceleration, but inflation prevailed. Another dynamic is that deflation actually exacerbates next inflationary waves by causing shortages of resources. Having said all this, the outcome is never entirely predictable.
Fantastic Alex. Thanks for the links!
Thank you Keith!!
Would be good to hear your thoughts on which online platform offers the best tools for a DIY approach. Especially for people new to this who want to practice first with relatively small funds. Would be interesting to see if others would like to join a Discord and learn the process together?
I think the best platforms - I got this by asking other traders - are Interactive Brokers and Saxo Bank, seemingly in that order.
Many thanks for that 👍
Very kind of you, thanks for all of the links!