Is high inflation coming after this crisis??

[jueco2005]

Many economists say so, even Bernanke has warned about a possible inflationary period after the crisis is over.

However, for this to happen new massive debt needs to be issued and I don't see too much room in the economy for that; unless of course they find a new creative way of doing it.

-Both business and consumers are full of debt. I don't see how they cant absorb more.

 

[saxon22]

With the debt that currently exists and the Fed's policy of providing more liquidity and bailing out all the financial losers like AIG,the inflation has got enough fuel to rise its ugly head.

 

[makloda]

The "inflation is right around the corner" seems so intuitive and logical, IMO it's just another crowded quasi-contrarian view that will turn out to be not so contrarian within due time.

Was there high inflation after the Great Depression? Or in Japan after 1990?

Why not?

 

[jprad]

Quote from saxon22:

With the debt that currently exists and the Fed's policy of providing more liquidity and bailing out all the financial losers like AIG,the inflation has got enough fuel to rise its ugly head.

I agree, inflation is definately in the cards. Although, my guess is that even with levels higher than we saw during the Cater years, it's going to be blunted somewhat by a few years of pretty severe asset deflation before it gets really going.

There's no way their plan can't include targeting the reflation of real estate assets to get things unstuck.

Play your cards right and reasonably timed real estate purchases should offset the impact in the longer run.

Anyway, IMHO.

 

[saxon22]

Different times, different economy and different circumstances. Time will tell who is right.

 

[saxon22]

Quote from jprad:

I agree, inflation is definately in the cards. Although, my guess is that even with levels higher than we saw during the Cater years, it's going to be blunted somewhat by a few years of pretty severe asset deflation before it gets really going.

There's no way their plan can't include targeting the reflation of real estate assets to get things unstuck.

Play your cards right and reasonably timed real estate purchases should offset the impact in the longer run.

Anyway, IMHO.

I have no problem with inflation since I am in debt (real estate). it seems the only way to wake up the real estate is to inflate at any cost solution.

 

[jprad]

Quote from saxon22:

I have no problem with inflation since I am in debt (real estate). it seems the only way to wake up the real estate is to inflate at any cost solution.

Well, that's exactly the rub; it can't be at any cost, which is why I mentioned that they have to reflate real estate.

The key to navigating out of this mess is going to be the successful management of getting real estate values to rise at a faster rate then core inflation, especially energy and food at that means that wage inflation is going to have to be moderate, relatively speaking, as well.

It's a tough nut that could just as easily go tits up as well...

 

[morganist]

Quote from jueco2005:

Many economists say so, even Bernanke has warned about a possible inflationary period after the crisis is over.

However, for this to happen new massive debt needs to be issued and I don't see too much room in the economy for that; unless of course they find a new creative way of doing it.

-Both business and consumers are full of debt. I don't see how they cant absorb more.

I think this topic has been posted ten times already this month. Any way from what I have read here the current situation is biflation the cost of commodities and necessities is rising but the cost of other goods luxury or white goods are falling.

Most people think there will be inflation partly from the gov spending and partly due to price rises from shortages of goods when businesses fail or due to having less competition. Either way it is likely inflation will occur especially when the ability of an economy to produce goods diminishes this happens when large numbers of the work force are unemployed.

 

[jueco2005]

So you think you are safe from inflation or that it benefits you?? Not good.

Quote from saxon22:

I have no problem with inflation since I am in debt (real estate). it seems the only way to wake up the real estate is to inflate at any cost solution.

 

[Troy McClure]

Bernanke and fuzznuts Timmy might wish they could inflate out of this mess.

You're right, consumer debt and rising unemployment can't help that cause- and inflation has a way of showing up in things people actually need, like health care and food and energy. So inflation might work if you don't mind the rioting.

So in other words Timmys plan may be a success if asset prices go up or stabilize, Obama can find growth somewhere while controlling prices with his reform and/or social programs, and expanding the balance sheet 10x does not cause a dollar/bond rout, and they stop asking for more, more, more bailouts. Good luck.
IMO