I know the .gov’s dump-money-from-helicopters plan is barely keeping our deflationary economy from peeling into a death spiral, but eventually they’ll overcorrect and inflation will return. Some are saying it already has. In that case, my new status as homeowner keeps me warm at night, because if inflation kicks up at all, a mortgage at around 5% is like free money. Hell, even now after federal and state tax deductions a 5% mortgage is probably really at 3.3%, and with, say, 2% inflation that’s you borrowing a big chunk of change at a measly 1.3%. At as little as 4% inflation, we get into Soviet Russia joke territory.
Isn’t that wonderful? La la la la la I can’t hear you about my house dropping 40% in value in two years….
Jim Rawles has been predicting commodity price inflation coupled with asset price deflation for a while now.
Are we there yet?