Investors globally have been wrestling with one overarching question since the financial crisis erupted in 2007: inflation, or deflation? Or to reduce it more crudely to the level of asset classes: equities, or bonds? For the last five years, both equity markets and bond markets have done pretty well, thanks to a combination of aggressive monetary stimulus and financial repression. But the good times cannot last; as Napier puts it, inflation is the only solution to the global debt crisis:

"This we know for sure: in the long run, governments must inflate away their debts. This is politically the easiest answer to a difficult economic problem."

David Fuller's view Most governments have been able to get away with inflationary policies because the increasing move to a global economy during the last two decades has presented some very deflationary characteristics: 1)Cheap wages from developing economies which have lowered many salaries in developed countries, at least in real (inflation adjusted) terms; 2) Competitive pricing due to greater competition has also reduced the cost of many goods and services, at least in real terms. Additionally, the accelerated rate of technological innovation has lowered manufacturing costs for many goods.

Think about it, in terms of your own business experience.

Meanwhile, inflationary pressures coexist, particularly in popular cities. One example: consider the rise of restaurant bills in London or any of your other favourite urban centres.

Interestingly, stale bull liquidation and short selling continue to put downward pressure on gold (weekly & daily) and the prices of other precious metals. I think the declines for gold and silver (weekly & daily) are beginning to overshoot, but for those of us who wish to repurchase… the lower the better.