I see some truth to your argument that in a deflationary...

I see some truth to your argument that in a deflationary environment cash is king. After all, if I have the same amount of money and prices have decreased then I have more buying power. However, to apply this principle is immature as one must consider people defending their net worth by purchasing assets that are increasing in price to compensate for their assets or goods and services that are decreasing in price. Sooner or later self preservation will kick in when people realise that their own goods or services are fetching less due to less demand and they are losing buying power. Perhaps the investors who sought out the right safe haven  will be left with more net worth than the person who saw the deflation as relative in that all assets, goods and services went down hand in hand in equal measure. The sad fact is that assets, goods and services are not all equal and their relative prices will fluctuate.

I see some truth to your argument that in a deflationary environment cash is king. After all, if I have the same amount of money and prices have decreased then I have more buying power. However, to apply this principle is immature as one must consider people defending their net worth by purchasing assets that are increasing in price to compensate for their assets or goods and services that are decreasing in price. Sooner or later self preservation will kick in when people realise that their own goods or services are fetching less due to less demand and they are losing buying power. Perhaps the investors who sought out the right safe haven  will be left with more net worth than the person who saw the deflation as relative in that all assets, goods and services went down hand in hand in equal measure. The sad fact is that assets, goods and services are not all equal and their relative prices will fluctuate according to their perceived value. If it is any conciliation right now I think cash is king as global panic has not kicked in firing up punters' needs for safety.

On a personal level, I know I said I am buying physical but I have decided to only buy 1 kg bars at a time and not be so gun ho with my accumulating as inflation and deflation are the realm of central banks and keeping track of CB moves is anything but a quick process. Inflation and deflation and how they are approached by CB's is perhaps the slowest form of watching grass grow that I can imagine and I think people should reside themselves to the fact that we are still in early days from when the first liquidity measures were taken and there is still, as Janet Yellen likes to put it "considerable time" left to react. Therefore, I have taken a step back from the wild swings of paper gold and am comfortable placing bets on physical, which is somewhat still dear in value relative to the turmoil the world is facing due to the fact that I can afford it and not have to worry about the costs of producing it.