What kind of inflation are we headed for?

#1

TheDeeble

Guy on the Couch
Joined
May 6, 2007
Messages
9,385
Likes
7,769
#1
Inflation is something the major news medias seem to be mostly avoiding real discussion on so far as I can tell. And the left seems to be remarkably quiet on the subject also.

I've read two major points.

1. Whenever the recession is over and the economy starts to rebound inflation is going to become a major concern.

2. Much of Obama's spending thus far hasn't actually gone into effect and won't do so for a little while. When it comes into play inflation will, again, become a major concern.

As far as inflation goes I've seen everything speculated from minor inflation where it's more of a slight inconvenience to hyperinflation where it'll take a garbage bag full of cash to buy a gallon of milk and it will be far worse than the current situation we're trying to get out of.

I think it will be more than minor as you can't have a few extra trillion dollars chasing around the same amount of goods. But as for how bad, I'm personally not sure.

And to be fair, I read an interview with someone from the Obama administration (can't remeber if it was Geithner or whoever) saying they realized inflation is a risk, but they have some ideas to combat inflation when it comes around.

Your thoughts? I'm interested to know.
 
#2
#2
And to be fair, I read an interview with someone from the Obama administration (can't remeber if it was Geithner or whoever) saying they realized inflation is a risk, but they have some ideas to combat inflation when it comes around.

I would like to know what those are. Seems like witchcraft to me. I always thought inflation is not only going to, but needs to happen for the economy to stay economically healthy after all this spending.
 
#3
#3
moderate inflation is fine (3-4%) and healthy. high inflation not so much. i wouldn't be buying any long term bonds right now.
 
#4
#4
moderate inflation is fine (3-4%) and healthy. high inflation not so much. i wouldn't be buying any long term bonds right now.

Once inflation does hit, and interest rates inevitably climb, aren't bonds a good, safe investment?
 
#5
#5
wheelbarrow-mutilated-728910.jpg
 
#6
#6
Once inflation does hit, and interest rates inevitably climb, aren't bonds a good, safe investment?

if you buy the bonds then.

an example:

the current 30 year treasury is 3.73%
if in 5 years the 25 year rate is 7% the bond you bought today for $100 at 3.73% would be worth $61.

the best investments in an inflationary environment are real estate and the stock market.
 
#7
#7
if you buy the bonds then.

an example:

the current 30 year treasury is 3.73%
if in 5 years the 25 year rate is 7% the bond you bought today for $100 at 3.73% would be worth $61.

the best investments in an inflationary environment are real estate and the stock market.

I was thinking once rates go up to between 8-10% (assuming they do) I would start purchasing some bonds for my 9 month old to hold onto for later in life.
 
#8
#8
not a bad idea. personally if i had a young kid i'd be putting money into a 529 plan and going all stocks.
 
#9
#9
Inflation hit in 2008 hard and we didn't give a flip.

The inflation of 2010 will be light, unless we let oil go back to 100+ USD / barrel.

Seems that a lot of the foreclosed properties are getting snatched up by people these days.
 
#11
#11
the best investments in an inflationary environment are real estate and the stock market.

Remember where you heard this, the very best investments are in health care, hospitals, HMOs and health insurance. (probably in alternative energy also, but that is hit or miss depending on how politically connected the management and ownership are.)

63672_600.jpg


Well second best, the best would be in central banking but that stock isn't publicly available, now is it??
 
#13
#13
Once inflation does hit, and interest rates inevitably climb, aren't bonds a good, safe investment?
depends on when you buy them. When inflation gets ugly and some solid munis get to 10 and 12 percent, I'm a buyer.
 
#16
#16
moderate inflation is fine (3-4%) and healthy. high inflation not so much. i wouldn't be buying any long term bonds right now.

Why is moderate inflation fine and healthy? If my income is fixed how is paying 3-4% more for anything healthy?
I know in its simpleist form inflation is "too much money chasing too few goods". With $1 tril being artificially pumped into the economy don't you think it could be a lot worse than 3-4%?
 

VN Store



Back
Top