I've read the shiff books, black swan, history of money, manias panics and crashes, ascent of money, almost every post from mish, jesse, denninger, sinclair, willie, et al. over the last 2 years. The conclusion I have reached is that this is a tug of war between inflation and deflation, each moving in and out of vogue. The authorities currently rotate the dial one way or another to adjust to their liking. They must be seen to be "doing something", which currently amounts to nothing more than buying votes with printed money.

Once this activity becomes unpopular, the path will change. These influences come from both domestic and international locales. Each will exert their own unique pressures, causing more and more "turbulence" as Taleb would say. It continues until things can no longer be controlled. A new perspective and social bias emerges. Trust gives way to rejection. Lies are exposed. What the emporors do with this reality will determine if they keep thier clothing, or not.

The last 12 months has seen volatility and turbulence without precedent and I would not be surprised if something breaks soon - one way or another.

Will it be trust of the USD and the central banks? Will it be trust in the financial system? Will it be both? I've prepared my portfolio for all outcomes - and am currentley favouring the infationary scenario. It doesn't make me sleep any better though, we are truly fortunate to live in "interesting times". Too bad the stakes are so high..