End of disinflation

In Disinflation: The 3x3 World, David Roche, chief strategist at Independent Strategy in London, argues that the world's "debt mountains will not be eroded much by the moderate rise in inflation, but the cost of servicing the debt will jump significantly".

That will force consumers in the US to cut spending, slowing economic growth. The US dollar will fall and equity markets will be hit. Rising inflation means bonds will also suffer.

Roche suggests that investors "raise their sights beyond the immediate prospects for financial markets toward the search for alternative assets, such as commodities, gold-linked investments and private equity."

Pretty depressing stuff, overall.