Inflation vs deflation

Robert Prechter and James Turk on inflation vs deflation

Robert Prechter of Elliott Wave International discusses inflation and deflation with GoldMoney's James Turk in this podcast. They also talk about GoldMoney, and the advantages of owning allocated gold stored at secure vaults.

Both men differ on the question of whether or not inflation (defined as a rising price level) or deflation (when prices fall) will be the dominant economic trend in the years ahead. Prechter argues that governments and central banks will be unable to prevent a big collapse in financial markets, owing to debt defaults and massive contractions in bank lending. In contrast, Turk thinks that America is heading for hyperinflation, owing to the US government's unwillingness to change its spending habits and the Federal Reserve's continuing monetisation of government deficits.

However, they agree that regardless of whether or not deflation or (hyper)inflation prevails, owning gold is still desirable -- provided that it is held in allocated form in secure storage. James and Robert both see gold as insurance against financial chaos, and as a means of protecting yourself from a collapse in the value of stocks, bonds and real estate.