Gundlach bullish on bonds. still thinks deflation is more likely than inflation

[stahleyp]

http://www.businessinsider.com/jeff-gundlach-the-usa-cant-handle-a-surge-in-interest-rates-2010-12

 

[biaggio]

I was just thinking, if we re going to have a lot of deflation, what is wrong with just holding cash? As time goes by you ll be able to buy more with each dollar.

 

I think it is crazy to buy any bonds at such low yields.

[Munger_Disciple]

If you really think there is going to be deflation, you should buy long-dated treasury bonds.

[Parsad]

If you really think there is going to be deflation, you should buy long-dated treasury bonds.

 

If you think you will be in a prolonged deflationary environment.  If you face a couple of years of inflation or deflation, it won't matter.  Buy cheap, sell dear.  Cheers!

[twacowfca]

Ain't gonna be deflation.  Why?  Cause The Fed and The Treasury have been goosing the money supply (M2) since last June at a 6% annual rate, up from about a 2.5% annual rate in the preceding 18 months.  They plan to keep doing this for another 6 months.  There is a lag of about 18 months on average until the full force of M2 expansion hits the economy.  By this time next year, the thought of deflation will be a distant memory.

[Munger_Disciple]

Future is obviously uncertain. But if I had to bet, I would also bet against deflation.

[stahleyp]

I can't see how there can be deflation, either. But Gundlach and Watsa know quite a bit, and they both are see deflation as a not insignificant possibility. We'll see!

[Guest broxburnboy]

Another well reasoned counter point of view:

 

http://www.fgmr.com/numbers-do-not-lie.html

 

[Guest dealraker]

Make a prediction- an extreme one.  If you are wrong nobody gives a flip and nobody can remeber anyway.  If you are right you get notoriety.  Just keep making these predictions and simple probabilities work with you so that you'll get all the attention you desparately wanted all along.