Famous American investor and macroeconomic expert George Gammon stated that the market has misread the current economic signals.

During a recent interview at the New Orleans investment conference, he refuted the prevailing market sentiment. He believes that in the near future, the more likely outcome is deflation rather than inflation.

Gammon said, "The market did not predict deflation next year, their expectations were exactly the opposite. If you go back to the 1970s, when unemployment rates skyrocketed, this is what we usually see in economic downturns or hard landings, and the result is deflation

Gammon pointed out historical similarities and emphasized that although inflation may resurface, the more likely outcome is deflation.

He said, "If you think the likelihood of us experiencing a recession is high, and the yield curve within the cycle does show the same pattern in the short term, then your basic assumption should be deflation. Market predictions are completely opposite." "If you push back time by one or two years, the final result is rarely another acceleration in consumer prices, usually deflation. Due to the response mechanism of central planners, inflation accelerates as a result

Gammon warns that the real economic collapse usually occurs after the Federal Reserve starts cutting interest rates.

He said, "When you observe the yield curve, you will find that crashes rarely occur when the curve is inverted. It occurs when the Federal Reserve starts cutting interest rates, making the curve steeper and not inverted, and that's when things happen

As far as the timing of economic recession is concerned, Gammon pointed out that we can look at the asset foam formed in the US economy.

He said: "The entire U.S. economy is built on asset foam, and these foam may continue, but they will not continue indefinitely into the future. So what can pierce the foam and affect the total demand? At this time, you will see an economic recession, which does not mean that there will be an absolute collapse like a huge financial crisis, but you will see a balance sheet recession, which may be very similar to the situation in 2001."

Gammon refuted concerns about the imminent debt crisis, claiming that the real problem lies in excessive government spending. He explained that the demand for US bonds, especially foreign banks seeking to profit from interest rate spreads, actually provides the government with an "unlimited credit card". This in turn leads to unrestricted spending, Gammon said, distorting the economy and hindering the effective allocation of resources.

Gammon did not focus on reducing debt, but advocated for reducing government regulation and bureaucracy. He believes that this will 'liberate the market', unleash the vitality of entrepreneurs, thereby increasing the production of goods and services, and ultimately increasing national wealth.

In terms of investment strategy, Gammon urges investors to prioritize risk management and focus on identifying favorable asymmetric assets, namely those with greater upside potential.

He emphasized that industries such as gold, silver, mining, and uranium provide such opportunities, but he cautioned against trying to seize market opportunities.

While acknowledging the possibility of short-term fluctuations in commodity prices, Gammon pointed out that commodities will experience a super cycle, implying a long-term upward trend.