think it won't happen?, page-113

Horsa, "The Confederation of British Industry predicts that higher than anticipated rises in the cost of living will push the Bank of England (BoE) to begin increasing interest rates in the spring.

..The CBI said it had raised its quarterly forecasts to take into account the "persistent strength" of energy and commodity prices."


These are predictions and forecasts so take them for what they are. Meanwhile in the US, the world's largest and most influential economy, annual core CPI has fallen to the lowest level in almost 50 years of records. If the commodities bubble deflates then CPI will turn negative for the first time since the 1930s. And the reason commodities have rallied so strongly is on the back of great inflationary 'expectations' - not because of any 'real' inflation.

A resumption of the larger-degree deflationary trend would hit stocks and commodity prices (including oil, silver & gold), real estate and forex (especially the euro) and should result in a rush back to the 'relative' safety of the US dollar. During deflation, safe cash currency is about the only asset that assuredly increases in real value (ie. purchasing power).