From Wealth Daily
The Easy Way to Profit From Falling Currencies
By Dr. Steve Sjuggerud
Tuesday, September 23, 2014
Are you worried about the government printing trillions of dollars and creating inflation?
Then it may surprise you to hear that deflation is a greater threat than inflation today to institutional investors.
According to a recent Bloomberg poll of institutional investors in Europe, "77% viewed disinflation or deflation as a greater threat than inflation."
This is the big story...
So what should you be worried about? Inflation or deflation?
There are good arguments on both sides. But I expect that, ultimately, inflation will win out. Governments are bad at a lot of things... but one thing they do well is print money.
Governments are deathly afraid of deflation... They much prefer inflation for many reasons. For example, inflation makes people feel like they're making more money each year, and when a government prints money, it makes its existing debts "cheaper" to repay.
Right now in Europe, Mario Draghi (the head of Europe's Central Bank) is fighting deflation with all he has... In a historic move, he cut interest rates to BELOW zero. And just last month, he announced he wants to "give" $1 trillion to the banks – he wants to print money.
In short, Draghi wants to follow the U.S.'s script of the last few years – by cutting interest rates to record lows and printing money. He wants to create the "Draghi Asset Bubble," and he doesn't mind if the euro currency falls while he's doing it.
You can see Draghi's plan at work in the one-year chart of the euro. As I told you yesterday, it has followed our "script" and plummeted in value. This is going to stimulate the European economy... and drive European stocks higher.
Read more from Wealth Daily >>
The Easy Way to Profit From Falling Currencies
By Dr. Steve Sjuggerud
Tuesday, September 23, 2014
Are you worried about the government printing trillions of dollars and creating inflation?
Then it may surprise you to hear that deflation is a greater threat than inflation today to institutional investors.
According to a recent Bloomberg poll of institutional investors in Europe, "77% viewed disinflation or deflation as a greater threat than inflation."
This is the big story...
So what should you be worried about? Inflation or deflation?
There are good arguments on both sides. But I expect that, ultimately, inflation will win out. Governments are bad at a lot of things... but one thing they do well is print money.
Governments are deathly afraid of deflation... They much prefer inflation for many reasons. For example, inflation makes people feel like they're making more money each year, and when a government prints money, it makes its existing debts "cheaper" to repay.
Right now in Europe, Mario Draghi (the head of Europe's Central Bank) is fighting deflation with all he has... In a historic move, he cut interest rates to BELOW zero. And just last month, he announced he wants to "give" $1 trillion to the banks – he wants to print money.
In short, Draghi wants to follow the U.S.'s script of the last few years – by cutting interest rates to record lows and printing money. He wants to create the "Draghi Asset Bubble," and he doesn't mind if the euro currency falls while he's doing it.
You can see Draghi's plan at work in the one-year chart of the euro. As I told you yesterday, it has followed our "script" and plummeted in value. This is going to stimulate the European economy... and drive European stocks higher.
Read more from Wealth Daily >>
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