[Brad911]

Bear market rally? I think the market is stuck in a range and deflation, not inflation, continues to be the concern. When people at the treasury stop talking about "things getting better" is when they'll actually turn around.

The unemployment rate isn't going down (quite the opposite from a report released yesterday) so I'm not sure where all these bears see inflation coming from when wages won't be participating and US consumers won't be buying. Sprott is a smart man, but he's paid by selling an opinion to his investors and makes his money by supporting that style.

Look at the whole picture; we're not going anywhere anytime soon.

 

[Brad911]

Inflation is simply a product/outcome of any number/combination of actions of individuals or government, supply and demand.

We will experience higher inflation in the future, but the question that many fail to adequately cover is by "how much". If we were actually facing a hyperinflation environment (or the prospect of one) gold would be twice the price it is now. The fact it isn't is a very clear indication that 6-12 months out inflationary effects look rather tame.

In almost every high inflationary period we've experienced in North America over the past 100 years (very few) wages have been a significant component in contributing to the high rate of inflation. With unemployment where it is currently the government (either US or Canada) can choose to print as much money as they want, but they're only offsetting the effects of serious deflation in sectors like manufacturing and RE with little effect on inflation.

Will we see inflation at 4-5%?....I believe so, but certainly not 18-20% like so many are suggesting with their crystal balls. Monetary policy has an effect, but its not the sole contributing factor to a hyperinflation situation; that's the bottom line. Believe what you want, but there's not enough inflation in the market (or perceived) to justify much of what any inflation bull has to say at present. Once the economy turns around rates go up fast and you again see more pressure on housing and unemployment could still be around 7-8% easily.