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One hopes that the inflationary and deflationary forces cancel each other out.

But one of the possible scenarios that you cited was massive deflation followed by a sudden pivot towards hyperinflation. That's quite a challenge for investors. Bonds will look good and then suddenly be wiped out. Other assets (perhaps gold) could fall sharply during the deflation and then suddenly skyrocket during the hyperinflation.

Another reason for owning international investments is to hedge against the risk of hyperinflation in your home country. If international stocks were as expensive as large cap US stocks, I'm not sure what I'd invest in.
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