A critical analysis of popular deflation myths
(31.07.2009)
A critical analysis of popular deflation myths
For the investor today by far the most important question is deflation or inflation. I'd like to update an article from November 2008 (Link) by cutting 7 of the key arguments of John Mauldin's "Outside the Box" newsletter from July 6 (guest-authored by Niels Jensen) into pieces.
preliminary remarks: With 1 million readers "Outside the Box" is probably the electronic publication focusing on fundamental analysis with the widest circulation. Common sense and contrary analysis tell us that quantity and quality can go together only to some degree in the financial markets. The obvious reason: trading futures, options and so on is a zero-sum game, the gain of the one market participant is the loss of another one. Phenomenologically-teleologically one could even claim that the ‚purpose' of the financial markets is to separate market participants from their money... :-) Of course, these considerations apply to the Amanita newsletter as well: if circulation rises 10-100fold, then you shouldn't read it any longer.
