I do not believe inflation is on the horizon.
Much is written these days about the impending inflation (or even hyper-inflation) that we are doomed for as a result of all of this government spending, Treasury and Federal Reserve loaning, and the printing of money the U.S. does not have.
No, inflation is not an immediate concern but deflation is still a legitimate concern but it is beginning to dissipate even now.
If this money flooding the system was creating a fictitious demand for goods and services beyond companies ability to supply those goods and services, then yes, inflation could be a by-product. But in these economic times, the extra money is being used to pay down debt and build capital. It is not creating new demand as much as the powers at be would like it to do so.
The economy is not performing normally right now, so deflation (especially in housing) continues to be the problem and, based on the extensive studies of Dr. Ben Bernanke amongst others, this needs to be addressed with money supply. He made a great speech in 2002 on this matter that you can read at www.federalreserve.gov ). He is doing now the things he believed would be necessary if we had a financial situation like we are in today.
As a recent Washington Post article stated "...only when unemployment is low again can workers demand higher wages, forcing companies to raise prices..." then inflation may rear its ugly head. That is still a year or more away.
I am not convinced that even inflation cannot be controlled. At least, dangerously high inflation of double-digits, can be controlled because Paul Volcker showed us how to do that in the early 1980's and President Obama has him on his team now.
It is the 2-3% annual inflation that goes with fiat money (a financial system like the current world's system) that is the most damaging - not double-digit rates - and this will return.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.