Peter has long believed that the only resolution of the 2007-08 global credit crisis would be an inflationary resurgence (so far elusive), which would enable businesses, households, governments and the financial sector to de-lever. Hopefully this will be the story of the 2020s where the price level could jump by as much as 50% in the space of a few years! However, the price of failure is unthinkable misery - along the lines of the great depression. Peter discusses how the Central Banks don’t have a mechanism for stimulating private sector credit demand. Banks are in the firing line for huge provisions for bad and doubtful debts. Unlike in 2007⁄08 rating agencies are shooting first and asking questions later; Ford being downgraded to junk. The Fed’s stimulus may not be able to save all those downgraded bonds. Peter believes that there is scope for ETF redemptions on an epic scale. Volatility in the US Treasury market has undermined the stability, if not the entire concept, of the risk-free curve, and calls into question risk parity and 60:40 portfolio strategies. One sector that should be protected at all cost is the mortgage markets so investors should look at agency MBS securities. Conventional fixed income is becoming treacherous, when unanticipated inflation arrives the outlook for real yields and real bond returns will be negative. Consumer price inflation will come roaring back in sectors such as food, healthcare, pharmaceuticals, and the electric power system, favouring inflation swaps, TIPS and other index-linked securities. Gold, silver and platinum stand to do well in the new environment. Food is going to be a critical area, particularly in terms of security and supply chains. Bullish Chinese equities as they are playing a different game and don’t carry the same risks as elsewhere. Countries such as Norway could prove to be safe havens.