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Is High Inflation Now A Bigger Danger Than A Deflationary Crash?

Summary:
Revisiting the Ka-POOM! Theory. Do recent development alter its predicted outcome? Decision-making in an era of increasingly untrustworthy reported data The Everything Bubble is now in full melt-up. Poised for a crash, or the start of a new era? Positioning for the Endgame If you have not yet read Part 1: It’s Time To Position For The End Game, available free to all readers, please click here to read it first. What’s the more likely event at this point: a deflationary crash or runaway inflation? For a long time, Peak Prosperity co-founder Adam Taggart and I have hewed to the “Ka-POOM!” theory, which states that a major deflation will scare the central banks so badly that they overreact and pour too much liquidity into the system, thereby destroying it. To visualize how this will play

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Is High Inflation Now A Bigger Danger Than A Deflationary Crash?
  • Revisiting the Ka-POOM! Theory. Do recent development alter its predicted outcome?
  • Decision-making in an era of increasingly untrustworthy reported data
  • The Everything Bubble is now in full melt-up. Poised for a crash, or the start of a new era?
  • Positioning for the Endgame

If you have not yet read Part 1: It’s Time To Position For The End Game, available free to all readers, please click here to read it first.

What’s the more likely event at this point: a deflationary crash or runaway inflation?

For a long time, Peak Prosperity co-founder Adam Taggart and I have hewed to the “Ka-POOM!” theory, which states that a major deflation will scare the central banks so badly that they overreact and pour too much liquidity into the system, thereby destroying it.

To visualize how this will play out, think of what happened in Beirut this week. Customs officials there stored thousands of tons of ammonium nitrate fertilizer at their seaport, for years.  The pile just sat there doing absolutely nothing.

After years of inaction, the port authorities became lulled into the erroneous conclusion that nothing would ever happen.

But then one day a spark came to life, starting a fire, and then all at once — POOM! — the entire thing blew up with devastating effect.

This analogy works pretty well here as we approach the Keynesian endgame facing the global economy.  The pile of $trillions in bad debts issued over the past decades has been the fertilizer.  Covid-19 was the spark. And now we’re simply waiting for the entire economic and financial system to explode.

Which is why it’s so critical now to prepare by focusing on…

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