The Valor Blog.
Investment News and Views, Direct from Our Team.

Deflation to continue?

A good article here by Stephen Koukoulas regarding the low inflation environment we are currently in.

The most important point is in the last paragraph. It states that “inflation will be staying too low despite the best efforts of the G7 central banks to kick it higher”.

When central bankers have their backs against the wall with a choice of inflation or deflation, it is a good bet that they will strive for inflation every time. Whilst no one knows if or when inflation might kick it, it is not wise to invest your hard earned savings on the assumption that it is not around the corner.

Those holding too much cash or low yielding bonds when inflation rears its ugly head should get their rubber duckies out because they could take a bath.