Gyroscopic Investing

http://online.wsj.com/article/SB1000142 ... _whatsNews

"Some of the world's leading investors are becoming more worried about deflation and are re-shaping their portfolios to prepare for a possible period of falling prices.

Bond-fund heavyweight Bill Gross, investment manager Jeremy Grantham and hedge-fund managers David Tepper and Alan Fournier are among the best-known investors who are bracing for a possible bout of deflation, a development that could cripple global economies and world stock markets."

Makes me think of the Apple slogan "There's an App for That...".

Yeah, it seems like everybody and their uncle is now convinced of deflation.

There are of course exceptions:

Last month Tom Gleason wrote "Many investors have capitulated on inflation ever making a strong comeback except for Greenspan, Fuss, Pento and The Gleason Report." In his August report he says he can't predict when yields will rise, but he expects some event to suddenly blow a lot of printed money back into the economy and cause inflation. (Gleason Report August 2010)

Goldonomic writes: "As the deflation rhetoric intensifies and scares the hell out of the gold community, it’s not hard to find a bond bull praising the virtues of fixed investments. Talk, however, is cheap. Money flows suggest that the bond bulls and all their bravado are standing in front of oncoming steamroller. Connected money, huge bulls in April, has turned statistically bearish into strength. Technically speaking, the up trend appears to have been broken. Keep watching US Long Bonds (TLT) for the completion of a distribution sequence known as a “Three Drives to a Top.”? (...)
Remember that a reversal and potential crash of the Bond markets indicates the Monetization of Debt has been initiated and the Hyperinflation will follow soon. Lower Bond markets mean HIGHER interest rates. Higher interest rates mean higher Mortgage rates and more downward pressure on the Real Estate markets and more risk for the Credit Default Swaps, those financial institutions who manufactured these and those who bought and used them."
Goldonomic, 3 August 2010 http://www.goldonomic.com/articles%20in%20full.htm

Talk is cheap... Those who have a PP don't need to care. :-)

I predict that now that everyone is talking about deflation yields may drift upward for a while.

When this many people are thinking the same thing, they are usually wrong.

I have found the deflation thesis persuasive since mid-2008, but it's amazing how people have all of the sudden noticed that credit contraction is deflationary and there isn't that much that can be done to stop it.

Ben and his helicopter strategy have been totally ineffective so far.

Inflation will arrive sooner or later, but it might be a lot later than people think (as in decades later).