Marc Faber : We should have been in deflation after 1980

Dr. Marc Faber : "...We should have been in deflation after 1980 because the Kondratieff peaked out in 1980 or in the mid-seventies to the eighties and then we have a downward wave in commodity prices and declining interest rates. That is the time we should have had deflation. But now that commodity prices are turning up it‟s more likely that we are in a very high inflationary environment and the reason I have this debate with the deflation is not so much that they believe in deflation and that I believe in inflation - but their conclusion to buy U.S. government bonds in a deflationary environment is, of course, a disastrous recommendation because if you really have the credit collapse, the deflationists are arguing about, then obviously tax revenues will collapse and the fiscal deficit will go to the moon.I mean, Tim Geithner just signed the treasury report about the budget deficit about the financing of the U.S. for 2010. The deficit was not $1.4 trillion but $2 trillion signed by him. And so the government debt goes up and up and up and up and then the interest payments from the government go do go up and the quality of government debt goes down and so eventually you have a junk bond in the U.S.. I believe the U.S. government bonds are junk already today but as long as you have rating agencies that are dreaming and publishing reports that are completely useless, people still buy the government bonds in the U.S. " in a recent interview with Chris Martenson