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You don’t need [actual] deflation—a reduction in the outstanding supply of money—to have markets react to a decrease in the rate of money supply growth…, anticipate the eventual deflation [and begin to price it into the market. Remember 2008?] Oil prices fell from $147 in July of 2008 to $33 per barrel by early 2009. The S&P 500 went into free-fall starting in September of 2008 and bottomed out in March of 2009—falling almost 50% in six months. This is what has already happened to the gold mining sector but, remember, central banks may be on a counterfeiting holiday right now but they have a history of taking very short vacations.
So says Michael Pento (www.pentoport.com) in a recent article posted on King World News.
The introduction to the article has been provided by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!). This paragraph must be included in its entirety in any re-posting to avoid copyright infringement.
The article can be read in its entirety here.
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