A tale of two views

Lyle Stein - September 03, 2010

“It was the best of times, it was the worst of times, … it was the season of Light,

it was the season of Darkness, it was the spring of hope, it was the winter of despair …”

Charles Dickens penned these words in his 1859 novel, “A Tale of Two Cities.”

Today, Dickens’ words ring true as we ponder the inflation vs. deflation debate. We wish our crystal ball could firmly predict one side of the economic debate or the other, but we can’t make such an impossible call.

Today’s bipolar world of market commentary can essentially be described by the two extremes of Great Recession or Great Reflation. In the former, jobs continue to disappear, the economy shrinks and we go into deflation; people hoard dollars today to buy goods at lower prices tomorrow. In the latter, jobs are created as confidence returns, the economy grows, and inflation returns; people spend dollars today to avoid buying at higher prices tomorrow.

READ MORE LEON FRAZER MARKET PERSPECTIVES SEPTEMBER 2010

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