Thursday, August 20, 2009
Correlation
The high correlation of diverse assets is, of course, characteristic of deflationary recessions. We are not used to such high correlation, since deflations are relatively rare in comparison to other types of cycles.
It is easy to forget that the current cyclical bear market started as a credit crisis; and credit crises are by their very natures deflationary.
Unlike the 1930s, this time the Fed threw all the ammunition it had at the deflationary monster; the behavior of gold recently suggests that he's still alive and may have some life left.
It is easy to forget that the current cyclical bear market started as a credit crisis; and credit crises are by their very natures deflationary.
Unlike the 1930s, this time the Fed threw all the ammunition it had at the deflationary monster; the behavior of gold recently suggests that he's still alive and may have some life left.
# posted by MATT E @ 8:31 AM 
