Gregor Weekly Macro Note: Saturday 17 October 2009

Gregor Macdonald
October 17th, 2009

It’s not too early, to think about the endgame. The current shape of our crisis, which now seems a logical bookend to last year’s acute collapse, will eventually have to pass onward to the next phase. Last year was the panic. This year, I am calling the drain. Each of these two phases had their own rules, their own special methods for making, or losing, money. The inflationists, after having been so very right, were slaughtered in the back half of 2008. Now it’s the turn of the brittle deflationists–perma-bullish on sovereign debt in the face of supply, scornful of asset reflation in the face of trillion dollar money printing–to pay the price of certitude. The governor for these divergent views remains, of course, the currency. For, it is through the currency that all fiscal and monetary policy is eventually expressed, and through which the rest of the world…(this article continues for subscribers through the membership gateway, on the right side of this page.)