that inflation is never going to return, do not know history. Sooner or later we will be hit with big-time inflation. It is the eventual solution to the debt and redistributing wealth from retirees to the younger workforce. Those on fixed incomes will get the shaft. That's your older retirees and pensioners. The media blasts those receiving pensions now. If you want to take their money away, just stoke inflation, especially wage inflation. It's coming. And if you think that Social Security COLAS will keep up with real inflation, think again.
How do you factor in the fact that low inflation and a weak dollar over the past 5 years has encouraged foreign investment in the US and helped decrease the trade deficit thereby stimulating our economy. As the cost of products and services go up, will we not go back to a large trade imbalance and outflow of dollars and a weakening of our economy? I think it is easy to assume the fed fiscal policies will ultimately lead to inflationary pressures, but I also think that the gov't will be keenly interested in controlling that inflation to meet other policy objectives. JMHO.
The government may be keenly interested in controling inflation but then again maybe not. The objective may be a lot of jaw boning but in fact they may be wanting to inflate to pay debt with lower value dollars. Then again, I do not thnk they have any intention to pay down debt because that would mean they would need the cahonies to eliminate the deficit and run a surplus and they are not going to reduce spending that much. If they raise taxes too much they stifle investment in wealth producing enterprises or potentially create black market conditions reducing the fed take even more. A lot of rambling, but the main point being if they ran a budget surplus and we endured all the short term pain,it would be very bad for PMs and ANV. Since I am convinced they will continue to print and run deficits, eventually it will be good for PM's and ANV. Right now velocity of money is low. When it picks up, that should be the turning point for a PM rally.