I read this Dutch book on deflation. The author suggested in 2005 that deflation was coming and supported this statement using the Kondratiev (sometimes Kondratieff) cycle. A new and updated version of his book was published in 2010 in which he suggests the crisis will last for another couple of years.
His theory, taken from Kondratiev, is that we are in the winter period of this fifty to sixty year cycle.
He also suggests that deflation is coming. America can’t keep up with their debt plus a couple of European countries are having trouble carrying their burdens when it comes to debt. China will come out of this period as the winner when we enter a new Kondratiev cycle called spring.
The author suggests deflation is coming. And this means that cash is golden, since you will be able to buy more with your cash. However, your debt will increase and it will be harder to pay off. So, according to this theory it would be a very good idea to pay off your debts and mortgage asap and hold on to a nice ‘stash.
Hey, that’s not a revolutionary new idea, now is it? That’s just common (Mustachian) sense!
P.s. You Dutchies who are interested in this book…it’s calle:d Deflatie in aantocht door Eric Mecking.