Are investors divided over the likelihood of inflation or deflation? The Financial Times has argued that the “simultaneous fears of both inflation and deflation also help to explain the breadth of a rally this summer, which has taken in classic inflation hedges like gold as well as government bonds”.   Monkeys with Dartboards It’s a harder market than ever to call. Post-global financial crisis hyper-loose monetary policy has failed to generate persistent inflation, despite the U.K.’s quantitative easing largess approaching three-quarters of a trillion pounds. If governments dig into their fiscal toolkits, this may have a greater—and more unpredictable—effect, so

Since January the price of Bitcoin has surged more than 90%, taking it over the symbolically but not economically meaningful USD2,000 mark (at the time of writing it stands at USD2,400). As so often happens when Bitcoin’s price breaks through a big round number, and especially when it coincides with a rapid acceleration in price momentum, it provokes a slew of media coverage decrying it as an intrinsically worthless[1] financial instrument more akin to a Ponzi, or pyramid, scheme. The near parabolic rise in Bitcoin’s price recently – see exhibit below – certainly does appear consistent with bubble dynamics. Exhibit 1: