Archive for January, 2009
Soros Validates Procerity’s Prognostication
On November 22nd, 2008, Procerity’s Prognosis was, “Expect deflation to take hold in the near future followed by a period of overshooting inflation.” This prediction now has the weight of George Soro’s insights behind it. According to the billionaire hedge fund manager, the monetary squeezing (reversal of the monetary easing) will be even more difficult to accomplish than the injections of liquidity. Draining the excess money from the economy will be politically unpopular because it will need to occur prior to the resumption of full employment.
According to Soros, the government will have to be very quick to reverse the flow of money it is currently pumping into the economy. Not only must the Fed act almost instantaneously, it must also be able to accurately pinpoint the juncture at which to change direction. Given the pace at which politically unpleasant decisions are made and the difficulty of timely diagnosing the state of the economy, Procerity’s earlier prognosis still stands.
Procerity’s Prognosis: “Expect deflation to take hold in the near future followed by a period of overshooting inflation.”