``... corporations in the Western economies now face a future of rising interest rates and deteriorating earnings. Not only will this make their share prices vulnerable to rising interest rates, but it will radically reduce hoped-for earnings. Therefore, stagflation has the potential to undermine equity markets with a bear market of greater than normal magnitude, destroying any link that protects investors in equities from inflation. There is a good historical precedent: the 1972-74 bear market in London reflected the last severe bout of stagflation, when similar economic dynamics were in play, and when the All Share Index fell over 70%... Essentially, the companies that survive a hyperinflation will do so by winding down their operations. There will be little or no escape for investors in companies with foreign earnings, because today’s inflationary problem is global... The only sector that truly benefits from the death of paper currencies is precious metals. ''

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