Stocks aren’t going to zero

As deflation appears (at least at this point) to have the upper hand, gold advocates face questions if not incredulity regarding their strategy. Rolfe Winkler deals with this issue in a column he wrote for Reuters here that is heavily dependent upon a Bloomberg column. He begins as follows:

Alice Schroeder wrote a great column for Bloomberg yesterday that I’m just getting to. The best stuff comes at the end, where she describes why some people are buying gold even though inflation doesn’t seem to be a big risk.

Winkler’s article and his references provide rationale for gold even under a deflationary scenario. His article ends on a scary note:

Stocks aren’t going to zero. They have option value. But a 90% fall from the peak is what I see happening eventually. Over what time frame, I haven’t a clue.