Caught in the Inflation-Deflation War

Adrian Ash from the BullionVault.com wrote an interesting article on the war between inflation and deflation that is currently going on. He doesn't pick any winner, and I think it is a reasonable stand.

I quite enjoyed this excerpt:

[...] in August last year, the Fed began slashing interest rates so low, so fast, the key Fed funds rate now sits 3.6% below the year-on-year rate of Consumer Price increases.

Sub-zero rates of return do not make for a bull run in cash. So if money itself becomes the only worthwhile asset to hold – as Richard Russell contends, even as cash-in-the-bank loses 3.6¢ of its value per year – then truly we're all freakin' doomed, along with the law of gravity and all logic.