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I appreciate your point on the value of cash in deflation. I have one more to add. The only asset better than cash is a steady stream of ever more valuable cash. The fact that there is buying in the long end(lots of buying) of a flat/inverted yield curve shows me that the market is predicting serious deflation. The market makes a lot of predictions, both good and bad, but this one seems pretty obvious.

What does this mean for equities? The last deflation we saw was post WWI. It ended in depression. The big problem for equities is the fact that we have a stench of deflation, with a heady whiff of wage inflation. There could be no situation worse for companies. It also promises mass unemployment. Is this what I predict? No. But it doesn't look like a promising time for stocks. However, who knows. Certainly, this is a scary situation for our economy, and a disturbing time to hold equities.

Could that be why people are unloading? Please tell me that nobody really cares about Monica.

I hope...
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