Dear Hendrick,

Thank you for contributing to the conversation.

You are correct to question the use of fiat currency in general — my narrow focus on the dollar is purely for convenience as I would suggest that it comes the closest to serving as a defacto global currency.

I for one am not of the view that inflation will remain low indefinitely — nor do I believe that inflation will increase in the short to medium term (5 years) — but that having been said, I stand to be corrected.

Again, we live in unique economic times.

In no point in our economic history have interest rates been so low for so long and yet inflation still kept in check — which means that the current global economy no longer fits neatly into empirical economic models and theories.

Against this backdrop, advances in automation, globalization and the ease of movement of labor and the means of production mean that labor as a function of the cost of production (a key factor in influencing inflation) has simply not been brought to bear.

I for one do not believe inflation will remain low forever — but then nobody (apart perhaps from PIMCO) predicted this new normal for the global economy.

Yours,

Patrick