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[quote]Along the lines of mjanar's question, I'm curious on your macro view of whether we are heading down the path of inflation or deflation? Obviously with hyperinflation your swimming against the stream on most shorts. [/quote]

Not necessarily. Theory has it that the Fed can inflate asset prices out of this mess since debt obligation pricing doesn't rise with the price of inflated assets. The problem with that theory is when reality hits it. If markets are inflated too fast, as in what's happening now, the price of ownership of said assets will rise too fast for the owners to be able to take advantage of the higher prices. Two examples: a car or a boat, with hyyperinlfation, can almost seem to stop depreciation. But if owner can't afford to operate the car or boat due to excessive fuel prices, then the advantage is nullified or even possible reversed.

Example 2: income producing or single family real estate. If a landlord gets hyperinflated, his expenses (fuel, electric, contract labor) will rise faster than his ability to raise rents (annually at best), hence drive him into distress or default. For the homeowner, hyperinlfation drives the price of ownership higher, faster than the real drop in interest debt service, thus puts him/her further into the hole.

If the fed does try to hyperinflate, my shorts will do just find since they are in companies that don't have the capital cushion to buffer a bumpy hyperinflation ride.