Stagflation is much more likely than Deflation – prepare accordingly

Blain’s Morning Porridge/Bill Blain/5-9-2023

Gold, silver and stocks performance 1970s
(% change)
overlay line chart showing gold, silver and stocks 1970-1979
Chart courtesy of • • • Click to enlarge

“Yesterday, I noted a number of banks quietly rowing back expectations Central Banks are about to start reversing the recent run of rate hikes – putting cuts back to 2024. Macro hedge funds are shorting rate cuts. What do they know that we don’t? They’ve got a view on sticky inflation and how central banks will respond.”

graphic image of a book and reading glasses A Good Weekend ReadUSAGOLD note: Blain takes a deep dive into the complexities of deflation and stagflation and says stagflation “looks nailed on.” Deflation, he says, belongs in “the same bucket” of misplaced hopes with transitory inflation. For those who would like to know how gold, silver, and stocks performed during the last episode of stagflation, we refer you to the chart above.

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