Friday, April 20, 2012

In what kind of Crisis we are?


Many talk about the 1929 crisis and they compare it to our historical period. However few people know there were huge differences in terms of Inflation between Germany and the US.

In the US prices dropped because of cash scarcity, generating what is called Deflation. Those who had cash, were in advantage because they had greater Purchasing Power.

In Germany instead, prices spiraled upward, generating Hyperinflation. Cash was loosing value, while who put their money in Inflation-linked investments made profits.

The main goods linked to the Inflation are Gold and Real Estate.

What I am interested to focus on is if we are in a crisis in which central banks print out currency. A lot of Currency. So I forecast Cash is too much diluted and inflation linked investment can take advantage from it.

Luigi Foscale

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