Inflation – How do we protect ourselves?

[moXJO]

There's only property really, I think inflation is on the cards because of all the Govt spending and printing of money.

Property with either no debt, or fixed interest(inflate your debt away without interest rates killing you). And hard assets (Gold, Silver, Art?,coins?). I'm sure there is more.

Heres a bit for the deflation side of things

However, the debt is still enormous and will weigh on our economy heavily for decades to come if we just continue to stimulate with no reasonable limits. Rising debt and rising taxes are inevitable due to the depth of this slowdown, with falling tax revenues and rising social costs. However, should we add insult to injury to try to prop up home prices that need to fall anyway and will fall anyway””and to support banks and major institutions that will fail anyway? Economists are claiming to learn the lessons from the Great Depression of needing to respond early on and of giving greater support to the banking system. But they haven’t learned the bigger lesson from Japan: you can’t stop deleveraging and deflating once major bubbles have peaked and demographic trends shift toward saving rather than spending. You can only provide short-term liquidity to the banking system to allow it to restructure in a more civilized manner.

How will this massive stimulus program end up with deflation instead of inflation (much as occurred in Japan)? Assets and credit will be destroyed faster than the government can stimulate the economy.

Unless this changes soon in response to the stimulus programs, which is unlikely, then deflation will continue to more be the trend than inflation. The threat to interest rates and Treasury bond yields probably will not be inflation, but rising risks of credit default, including of the U.S. government, as the economy continues to fail and worsen into 2010 and 2011 and the stimulus plan fails to bring the economy back to growth.

I suppose if people think things are ok and the economy gets moving, then inflation spikes? If they don't spend, and stay scared then its deflation city bargins.
If the economy looked like it were to get moving. I suppose buying oil stocks would probably see you right as a lot threw it in. And would be hard to meet demand if the economy were suddenly to get going again.

Aus is a bit hard to pick which direction we will go.

 

[MrBurns]

Cant buy property while this stupid double FHBG is still holding the prices up, need to wait, the timing will be critical.

Some time toward the end of the year at least. probably longer.

 

[Julia]

There's only property really, I think inflation is on the cards because of all the Govt spending and printing of money.

Don't think money is being printed in Australia yet, is it? Just the US and UK (so far.)

 

[MrBurns]

Don't think money is being printed in Australia yet, is it? Just the US and UK (so far.)

Not here yet, but if it's going on in the UK and US it will have to have an effect on us ?

 

[moneymajix]

Isn't Australia borrowing money to pay for the stimulus?