Headlines warning of the dreaded d-word, seem to be popping more and more in recent weeks, while a few skilled analysts (notably Russell Napier of CSLA) have been anticipating deflation for much longer.
I have to admit I've been a slow convert. For most of the last 5 years I've been with the gold, guns and tinfoil hat investors, who always seem to see hyperinflation just around the corner. Needless to say I've been scratching my head these last couple of years wondering when my Krugerrands were finally going to take off and soar to $5,000.
So what's my point? Well, if a wingnut like me can finally come around to the obvious reality that, despite 500 gazillion dollars of deficit spending and money printing, the global economy is racing toward yet another deflationary crisis, I'm guessing Ben Bernanke and Janet Yellen can see it too. In fact, as proper modern economists, deflation is the thing they fear most in the world and something they've undoubtedly kept a wary eye on for the last 5 years.
So allow me to make a prediction: No tapering tomorrow.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.