What's next: Inflation?

Anybody out there remember Economics 101? After the government releases a lot of money into the economy, too many dollars begin chasing too few goods. That nasty economic situation is known as inflation. And it hurts!

Two days of the stock market managing to stay of the positive side is far too soon to say the long-awaited economic turn-around is here. Still, I can’t add fast enough to keep up with how many ba-zillion dollars the feds are dumping into the economy. Once enough money gets into the economy, it will take a very deft hand to make sure that ugly circa-late-1970s-style inflation doesn’t hit. I believe we’ll feel the effects of inflation, no matter how careful our global financial leadership might be.

When inflation hits, all the folks who are holding on to cash instead of investing in real property (like real estate) will watch their funds devalue. Sure, it’s not as obvious as watching your 401K statements plummet. The realization may hit only when they try to purchase something. On the other hand, people who have purchased real property (like real estate) will watch its value grow.

To all you folks sitting on the fence, hanging on to your cash, waiting for real estate to hit bottom before you buy: prices are low, you have a plethora of opportunities from which to choose, and financing is available with good interest rates. Beware of inflation!