They suffered during the initial deflation because they weren’t properly prepared. If they are in cash when the deflation happens (and there is a LOT of cash on the sidelines), they win. They might take some losses for a bit, but they know that there will be some fantastic opportunities to deploy that cash when deflation hits.
Inflation is not an option at this point, barring a full-fledged currency crisis (not really an “option,” but something that might result as their inflationary tactics backfire on them). The Fed (and other central banks) is starving people around the world, and causing massive social unrest. I think they have pushed on this string as much as they possibly can, and it’s getting ugly.
I do understand that this is a contrarian viewpoint, and have always admitted that this is not an easy thing to predict. It’s just that their “inflation” is going into all the wrong places. Much of the inflationary run-up is being caused by speculation — all that cash is chasing assets and investments around the world because the Fed has foolishly forced rates into negative territory. At some point, actual end-users need to buy that stuff, and they are out of money. Of course, the speculators will buy and sell it to one another for awhile, but that cannot continue indefinitely. It is at that point — when the speculators realize there is no end demand for all those overpriced assets — that the deflation will happen.
