Monday, April 4, 2011

The Inflation Tsunami

As the world reflects on the earthquake and tsunami tragedy still unfolding in Japan, investors are seeking to understand the economic and financial market implications. There are some general observations that one can make at this point, the most important of which is to recognize that, in much the same way that the Japanese authorities are responding to the disaster with monetary stimulus, other major governments around the world continue to implement stimulus of their own in a futile and counter-productive effort to restore high rates of economic growth following the global credit crisis of 2008. The inevitable result of these responses to disasters, natural and man-made, is a global inflation tsunami which is going to cause significant economic damage. Time is running out for investors to escape into alternative assets.***
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