iBankCoin
Joined Nov 11, 2007
31,929 Blog Posts

“Deflation in an Age of Fiat Currency” by Russell Napier

“- To reach record lows [akin to those on offer in 1921, 1932, 1949 and 1982], US equities will have to fall by more than 60%.

– Central banks are straining to produce inflation, and developments in emerging markets (i.e. China) suggest a deflation shock is now likely.

– The capital Exodus from China is disrupting the creation of inflation.

– In the search for yield, cash is trash ‚ so now is the time to own cash. (This is an example of his dry contrarianism.)

 US Treasuries could repeat their 83% price decline of 1946-1981.

US stock markets aren’t cheap, not by a long chalk. Napier, like us, favors the 10-year cyclically adjusted price / earnings ratio, or CAPE, as the best metric to assess the affordability of the market. Unlike the traditional P/E ratio, CAPE smooths the near-term volatility by taking a 10-year average.”

Full article

If you enjoy the content at iBankCoin, please follow us on Twitter

2 comments

  1. Scavenger

    The US gov’t debt is being ‘forgiven’ via Fed Resrv monetizing, so bear market is not possible.

    • 0
    • 0
    • 0 Deem this to be "Fake News"
  2. CRONKITE

    let’s hope you are correct Scavenger.

    • 0
    • 0
    • 0 Deem this to be "Fake News"