Friday, May 22, 2009

Like the South, Inflation Will Rise Again

The Fed Prez for Philly is predicting a 2.5% inflation rate in 2011. This is supposedly higher than the Washington Fed's forecast. My prediction is about 8% because I think inflation is going to whip around and come like a buzzsaw if the porkulus cash and all the newly minted dollars the Fed is printing via buying T-Bonds results in an uptick in consumption. But we'll see. 8% may be off the charts but I have my reasons.

In a way, this might be a good time to stock up on stuff if you do have cash. Prices are going to begin ratcheting up once the slack in the economy dampens and people stop hording and saving. Since Americans love their stuff, it's just a matter of time because saving is so boring, so yesteryear. Why delay gratification when you can have it now, right?

No comments: