No where to run, no where to hide

As the storm cloud called deflation begins to set in across the globe, there is one truth that will hold true..."no where to run, no where to hide". Just ask anyone who piled onto the foreign markets, anti-US dollar and commodity bandwagon. They've been getting clobbered lately as the dollar rebounds, commodities crash and foreign stock markets continue to plummet. Hell, about a year ago I was ready to jump ship as well, but took my time to analyze the whole picture. I was close to calling Peter Schiff's investment company Euro Pacific and have him move all my investments into foreign stocks and diversified currencies. Something didn't seem right though, so I started breaking down the numbers. It pretty quickly became evident that the extreme money flows causing surges in those other markets was just a symptom of loose money trying to find large returns to keep their leveraged positions afloat. The fundamentals just didn't support the extremes that we were seeing. Sure emerging markets are a great story, but their exponential growth is completely dependent upon debt driven consumption from foreign economies. As deflation sets in and the global economies contract, the unwind of these positions creates a massive problem for leveraged models. We are just starting to see the beginning of this process.