[l2ridehd]

Inflation will happen. It is a fright train headed down the track at break neck speed and it will happen. It is not possible to print money at a rate 3 times GDP and not have it. I am not trying to move this discussion to political, there is enough blame everywhere, only trying to state what has happened recently that all of us need to understand to survive. If inflation does not happen the US will go bankrupt and default on it's debt. I agree that no one wants it but the alternatives are worse. We have spent money like drunken sailors over the past two years (again not going to say is was or was not required, TARP 1 & 2, National Health Care, QE2, 100,000 additional government jobs are all spending increases) and no amount of tax increases or spending cuts can solve the problem which would only cause the downturn in the economy to get worse. The only possible solution is to inflate the currency so the borrowed money to pay for the above can be paid back with money that is worth less. This will cause higher interest rates, a significant increase in inflation and higher unemployment.

The only real question is when. Those of us that figure that out will survive well, those that don't will have a standard of living that will drop by a huge amount. All of us are old enough to remember the 70's. My new car in 1969 cost me $3300, my new one in 1977 cost me $9400. Almost the same car. I had a job move in 1979 and the new home interest rate was 17% That home cost me $63000. Moved again in 1983, home was $175000 and again in 1985 and the home was $265000. The homes were a little different, but not all that much. The only difference today is the magnitude of the issue.

And when we finally move out of that cycle, when interest rates drop back down from double digit, unemployment returns to under 6%, and inflation is back under control, housing prices will rise from current pricing to 50% to 80% from where they are today. Again, the only real question is timing. When will this happen.