Monday's edition featured the thoughts of fellow deflationist Mike "Mish" Shedlock, who believes as I do that this world is far too deeply in hock to avoid a debt deflation. Mish covered a lot of ground in explaining why this is so, but I'd like to add my two-cents' worth, since he left a few things unsaid that could affect all investors ' even financial geniuses like George Soros and Warren Buffett. Speaking of whom, both supposedly have been positioned to profit from a weak dollar -- a strategy that has not worked out very well this year, to put it mildly. In the last quarter, Buffett took a reported $310 million hit on a $21 billion short-dollar position. That's chump change by his standards, but to paraphrase the late Sen. Everett Dirksen, a hundred million here, a hundred million there, and pretty soon you're talking real money. Even worse for Buffett, the dollar's rise has steepened considerably since. Given his propensity to take the long view, we shouldn't be surprised to learn at some point that he increased the size of his bet since it was last estimated. But what do we make of the fact that world's second richest man, known mainly as an equities investor, has gone outside of his bailiwick to mix it up in the currency game? And how do we regard this legendary contrarian's aggressive shorting of the dollar at a time when nearly everyone else hates it as much as he does? False Bottoms Well, I've always said that when deflation finally arrived it would be tough for investors merely to survive, much less prosper. But I had assumed all along that the big fortunes would be lost on the way down because bargain hunters were unable to imagine how much lower prices were yet to fall. We saw this happen during
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