Inflation vs. Deflation

The diamond 'overhang'

Responding to the global recession, the De Beers diamond cartel has cut back production at its South African mines and reduced the price of its rough diamonds between 15 and 20 percent. Even so, industry sources in South Africa are now estimating that diamond prices could fall another "59-63 percent." But the real fear of the diamond cartel is not just that retail prices will decline - it has managed that problem before - but that the public will begin to sell its hoard of diamonds, or what is called at De Beers "the overhang."

Is the Government Really Helping the Economy?

The numbers that I've seen would suggest that M2 (a measurement of money supply and an economic indicator used to forecast inflation) is growing right now, on a real basis after inflation, by about 23%.

The neverending war between excess hard assets and excess paper currency continues. I was absolutely convinced that deflation would win when I read the first article. I was absolutely convinced that inflation would win when I read the second article.

Fortunately, I read the first article again. I followed it up by reading the second article twice and then I read the first one yet again. I then read the first article three times, the second article two more times, then the first article again, and the second article twice.

Things are crystal clear in my head now! You know what? Maybe I'll just continue to sit in inflation protected treasuries and pray for deflation just like I have been doing, lol.