What are you going to do about inflation?

The wheels are in motion. In the near future inflation will arrive.The price of everything will go up. Wages will go up too but they will lag behind. Any adjustable loans you may have will also go up; the rates on your credit cards, home equity loans or ARM's. The value of the dollar will actually go down.

What are you going to do to protect yourself?

As far as a country I don't know what our country will do. As far as for our personal family, we will continue to do what we are doing now. Not spend on extras, hold onto as much cash as we can, trying to get as good a deal on things as we can, continue to bargain shop, shop at yard sales and thrift stores, we are eating out about once a month, fixing all our meals at home, packing our work lunches, growing food.

remember the inflation in the US is controlled by the government and will not reflect the true inflation.  If they say 5%, figure you're at 10%.  Food is not in the inflation index and I don't think energy is either.

You might be looking at a new type fiat currency, paper money, coming out of these meetings going on in europe this week.  You don't hear everything, much is going on behind the curtain.
Think the Wizard of Oz.  If this happens, you'll have instant inflation, but it will probably be phased in.  Fiat currency will become worth-less during this period.  If you want to protect your money, purchase silver eagles and gold eagles.  They will hold their value.  Remember in 1909, you could buy a good suit for an ounce of gold.  The same today, you can get a decent suit for around $1000.00 or one ounce of gold.   The writing is on the wall, if you want to protect your money, put it in something that is not going to drop in value. 

I really don't think inflation is totally bad, say we have inflation at 10X, so for every dollar you have today, you get 10 new dollars.  So as things adjust you might be living in a house that is valued at 300,000 today and a mortgage of say 300,000 also, with this decent type of inflation, your house becomes worth $3,000,000 and your mortgage is still at $300,000.  Say your wages today are $6000 a month, with the new money, you'll be making 60,000 per month, so this sounds crazy, but it can happen.  Now you see the relationship between new money and old money, you're making 60,000 per month and your house payment is still at 3,000 per month.

That is the only way it will help, actually many things can happen in the meantime and you could end up living in a tent and standing in line for a bowl of soup and piece of bread. 

The best way to check out what can happen is to look at today's Zimbabque or yesterday's Germany.  Zimby is manufacturing hyper inflation.  The stores will only accept gold for their goods.  Women are at the river panning for gold to feed their families.

The germans (in the 1920's) used the money for fuel in the winter, they put it in the fireplace to stay warm.  This time we ended up with Hitler as the end result.  The going currency in Vietnam during the war was gold leaf.  Very thin pieces of gold used as a currency.

One way the federal reserve could produce a new crop of dollars would be to take say a $10 bill and just stamp it 100 or add a zero to the 10 making it a 100 dollar bill.  That would be conservative and as time goes by, add another 0 making it a 1000 dollar note.  That would be hyper inflation.  I suppose some enterprizing people will learn how to create their own 0 adding, thereby by passing the fed.  Anyway hold on to your hat, you're in for a rough ride.

Johnray1 wrote: 4=largo,your reasoning in sound and simple for young people.But,what do older people on fixed incomes do? Johnray1

Johnnyray1, let me think about that problem for awhile.  I also am on a fixed income but years ago I realized SS was not enough and have been investing for a situation such as we are in.

I'm 67 and just got a job working for the cencus bureau, part time of course, but it will be enough to pay the taxes this year.  Only for about 3 months, then back to retirement.

Dr. Who,  What about buying gold?  That is....if you have the money.

Inflation maybe is the only way out of this crisis  

Dollar hopefully be lower bringing back manufacturing jobs

Salaries will be going up people will be able to afford houses again.

Penham... I think I'm going to faint...  :)

hi...I just meant that I was unable to find that combination of weather and taxes. I hear (and see) that California is beautiful.  I've been limited to the east coast dollar wise for my search.  We loved the weather in VA, but properties in Williamsburg are extreme.  Good advice to offer lower, I did that after my first child (felt brave) and when we moved in, the neighbor smiled and said, "You stole that house."   My thinking on the cosigning is...if one can afford the payments on that cosigned loan (otherwise a person shouldn't do it) then that person might also have the down payment to give or lend (a better situation)  usually cosigning  means the bank fells the person is risky....due to age or income.