Quote:
Originally Posted by KTP
I kind of agree with this which is why I am not too scared about buying intermediate term municipal bonds. Sure, I could lose 10% of my investment if inflation jumps to 7% or 8% really fast but with a 10% unemployment it would be a total disaster for the country (many more defaults and bankruptcies would thrust us back into a depression). I think it more likely that we get a slow creep up to 5% inflation over the next 5 to 10 years.
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I tend to agree with your last statement......
If inflation is by definition an increase in money and credit, then I think it's gonna be a while before we see any huge jump in inflation...
The Fed can print all they want.
The banks can offer loans all they want (however, currently, they're not)
The problem with beating the inflation drum right now is the fact that nobody WANTS to borrow.
I don't know what it's like where everybody else lives, but consumers and small businesses are not in the mood for borrowing and the risk associated with it right now.
Money can be printed, credit can be offered, but until there is an increase in appetite for risk, I believe inflation will wait.
Jeff