whats the opinion on inflation in the next 2-3 years?

[Appledrop]

obviously if anyone knew for sure they'd be a billionaire, and its all speculation, but this concerns me, as all my money is in cash, as I am saving for a house (without mortgage.. my credit history is way too bad for a mortgage) and it'll be 1-2 years before I hit this goal, and I just have this fear that one day i'll wake up and find this money is worthless or at least severely devalued:<...

at the same time, I don't want to be in the stock market, as i feel its all bullshit, and this recent run up seems way too fast..

anyway: poll please! just want to see opinions

 

[StageLeft]

I say 1-5 but maybe the 5-10.

If your money is in a money market account or something like that the returns will grow as inflation does. It still won't be ideal, but it's not like the pitiful rates we get now would stay where they were if inflation was 10%.

 

[Moonbeam]

I think it will rise or fall or stay the same.

 

[Moonbeam]

Maybe you should buy gold stocks.

 

[JS80]

Short term deflation, then very high inflation after deflation is over.

 

[LegendKiller]

Minimal inflation for the next 2-3 years, then moderate inflation thereafter, in line with historical norms. I think many people are thinking that the monetary expansion is going to hurt us. However, they're not seeing that spreads for ABS are coming in, hugely, which will give the Fed the ability to offload assets and destroy cash. As the system stabilizes further this will become the norm.

 

[RedChief]

Heavy inflation in 18 months. Its simple economics that when governments print money and put that money into circulation (aka the stimulus), the amount of money in the system will out weigh the value of goods and services available. This is then results in inflation as the goods and services increase in price to match the excessive amount of money in the system.

 

[LegendKiller]

Originally posted by: RedChief
Heavy inflation in 18 months. Its simple economics that when governments print money and put that money into circulation (aka the stimulus), the amount of money in the system will out weigh the value of goods and services available. This is then results in inflation as the goods and services increase in price to match the excessive amount of money in the system.

The problem with your thinking is you're not taking into account the money destruction from the credit crisis and also the amount of credit flowing *OUT* of the system from contraction of credit terms. Both of those are more than offsetting inflation from monetary expansion.

 

[Patranus]

Double dip recession with high inflation.

The banks have BILLIONS in their coffers thanks to the government. Once they start giving that money away it will be bad times...

 

[Vic]

Deflation, primarily due to the ongoing credit 'freeze.' Those billions in banks' coffers won't be lent until the defaults let up, and that won't be any time soon.

Heh... bad times if the banks start lending freely again.... WTF. If that happened the economy would bubble again and the markets would scream upwards (until the next bust, but that's besides the issue in addressing that silly comment).

 

[Carmen813]

I think I can sum up political feelings on this fairly accurately.

Liberals/Democrats - *hands over ears* lalalalala everything will be fine
Conservatives/Republicans - *hands over ears* lalalalala everything will be fine
Libertarians - OMGWE'REALLGONNADIE

 

[MovingTarget]

I don't see inflation as being a big issue over the next few years. Sure, it will go up, but not above historical norms. What worries me is the lack of jobs and the wage stagnation that we've seen for years...

 

[Siddhartha]

Oops, I meant to vote for deflation.

 

[yllus]

It sounds like Warren Buffet expects that leaders in the West will choose a policy of inflation over hiking taxes in order to maximize their chances of re-election.

The Greenback Effect

The Treasury will be obliged to find another $900 billion to finance the remainder of the $1.8 trillion of debt it is issuing. Washington?s printing presses will need to work overtime.

Slowing them down will require extraordinary political will. With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can?t come close to bridging that sort of gap.

Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes.

In fact, John Maynard Keynes long ago laid out a road map for political survival amid an economic disaster of just this sort: ?By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.?

Our immediate problem is to get our country back on its feet and flourishing ? ?whatever it takes? still makes sense. Once recovery is gained, however, Congress must end the rise in the debt-to-G.D.P. ratio and keep our growth in obligations in line with our growth in resources.

Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar?s destiny lies with Congress.

 

[retrospooty]

Originally posted by: Patranus
Double dip recession with high inflation.

The banks have BILLIONS in their coffers thanks to the government. Once they start giving that money away it will be bad times...

I am glad to hear you say that... because you are a complete f-ing moron. Anything you say is likely to be the opposite of what will really happen, so I see good times ahead.

woohoo!!!

 

[dmcowen674]

Originally posted by: MovingTarget
I don't see inflation as being a big issue over the next few years. Sure, it will go up, but not above historical norms.

What worries me is the lack of jobs and the wage stagnation that we've seen for years...

Which is inflation without calling it inflation

Let them eat cake

 

[her209]

Should inflation rate == population rate?

 

[piasabird]

Inflation does not matter if you dont have a job.

 

[sao123]

is it wrong to hope for deflation to pre-1990 levels??

 

[ahurtt]

Originally posted by: Money
obviously if anyone knew for sure they'd be a billionaire, and its all speculation, but this concerns me, as all my money is in cash, as I am saving for a house (without mortgage.. my credit history is way too bad for a mortgage) and it'll be 1-2 years before I hit this goal, and I just have this fear that one day i'll wake up and find this money is worthless or at least severely devalued:<...

at the same time, I don't want to be in the stock market, as i feel its all bullshit, and this recent run up seems way too fast..

anyway: poll please! just want to see opinions

TIPS if you're really that worried about inflation.

 

[Wreckem]

Short term(1-2 years) we will be in a deflationary period.
Long term 5+ years there will be inflation like we have never seen before.


In 5 years I can see us having around the same unemployment, lots of inflation, and much higher taxes.

 

[Special K]

Originally posted by: piasabird
Inflation does not matter if you dont have a job.

Yes it does. You still have expenses that need to be paid, and if their cost is rising then that just means you will burn through your savings even faster.

 

[MovingTarget]

Originally posted by: dmcowen674

Originally posted by: MovingTarget
I don't see inflation as being a big issue over the next few years. Sure, it will go up, but not above historical norms.

What worries me is the lack of jobs and the wage stagnation that we've seen for years...

Which is inflation without calling it inflation

Let them eat cake

Remember, all we see is the icing...who knows whats inside?!?!

 

[dullard]

Originally posted by: RedChief
Heavy inflation in 18 months. Its simple economics that when governments print money and put that money into circulation (aka the stimulus), the amount of money in the system will out weigh the value of goods and services available. This is then results in inflation as the goods and services increase in price to match the excessive amount of money in the system.

I know that I'm late to the argument here, but history disagrees. When goverments in the past have acted like ours just acted, history has shown a tendancy to get LOWER inflation. It is the opposite of what most people would expect.

In fact, there are signs that we are in deflation at the moment. The CPI (Consumer Price Index) from June 2009 was 215.693, but the CPI from July 2009 was 215.351. Yes, that is just a small one-month drop, but it equates to a 1.9% deflation rate if that trend continued for a year. What about the longer term picture? In July of 2008, the CPI was at 219.964. So in the last year, prices dropped 2.1%. True, most of that was oil prices. But the short term and longer term pictures are deflationary and NOT the heavy inflation that you mentioned.

I personally would bet that we have 0% to 1% inflation over the next 18 months. Then a gradual switch to more normal 3%-3.5% inflation.

 

[Vic]

If you take housing prices into account, we are already in deflation.