Hugh Hendry on Deflation then Inflation

Hugh Hendry came of brilliant as usual. Hugh has a nice bite to him with more than a few less than subtle jabs against the distinguished Columbia professor Jeffrey Sachs. Sachs tries to defend himself but it doesn't quite come off well. This is like the WWF of econ for me and an amusing exchange. Hugh is a little less Ivy League but has great vision and exudes a scrappy but tough common sense which I admire a bit more than academics even though I went to Columbia myself. For what its worth I barely got in.

Hugh has made two interesting points here and elsewhere. 1) The Fed's current experiment has never succeeded before. Nobody has ever been able to inflate their way out of a debt crisis with a fiat currency. It a lab experiment that changes daily. 2) The worst case scenario is deflation followed by hyperinflation. He is betting quite hard that this is what will occur.