Jeff Nichols

Some Lessons on Beating the Deflation Trap

I believe we will see a longer, deeper decline in business activity than most, lasting into late 2009 or, more probably, 2010 — and likely to be accompanied by some of deflation, particularly in commodities, food, autos, and a variety of consumer goods. To be honest, deflation has been with us for some time already, first in real estate markets, then on Wall Street, more recently in oil and commodity markets, and, as anyone shopping for the holidays will soon notice, in many retail stores. As I review on my blog, NicholsOnGold.com, gold is proving to be an effective deflation hedge . . . and when the economy switches into forward gear and inflation replaces deflation, gold will shine still brighter.