-- Germany’s 30-year bond yield dropped below that level for a second day after touching 2.96 percent yesterday. The sluggish global recovery from recession means German consumer prices will rise just 0.9 percent this year, according to International Monetary Fund forecasts, less than half the average since 1980. In the U.S., Pacific Investment Management Co. sees a 25 percent chance of a sustained period of falling prices, and the two-year Treasury note yield has also declined to a record low. --
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Comment: As of now the deflationists have the upper hand. Will they be right? Nobody knows for sure at the moment. Over the past three years a double strategy (gold, natural resources and bonds) have fared best, banking on both possibilities with the idea of unloading one of these two sides when the picture clears.
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