“The markets want deflation, and they want the world’s unsustainable debt pile to be reduced. There are three ways to reduce the debt pile. One is to engineer sufficient economic growth (no longer feasible, in our view) to service the debt. The second is to default (which, in a debt-based monetary system, amounts to Armageddon). The third: explicit, state-sanctioned inflationism, and financial repression. The reason why markets have become so volatile is that from day to day, deflationary and inflationary forces are duking it out, and neither side has yet been convincingly victorious. Who ultimately wins? We think we know the answer, but the outcome will likely be a function of politics as much as investment forces.”

– Tim Price