Inflationary or Deflationary?

[wsucougz]

Where are we headed? Many such as Buffett, Bernanke and the great bond trader Bill Gross suggest that, with all the printing of money going on, we are headed for inflation in the very near future.

These guys are obviously way smarter than me, but I wonder if instead we're not headed for deflation in the near term. In order for inflation to occur, as I understand it, that money has to begin rapidly changing hands. Will it really be enough to offset the slack in demand across the board for raw materials? And what about the fact that everyone else aside from China have been firing up their printing presses as well, thus weakening their currencies in unison?

If deflation deepens, commodities prices would plummet further and that would probably be really bad for Oklahoma City.

Your thoughts?

[dismayed]

No one really knows. We were headed into serious deflationary territory at the beginning of the year. The whole reason for the bailout/spending bill was to create a bunch of false demand, which with the level of spending that is happening now and what we are doing to the money supply would normally trigger hyper-inflation. I think their strategy is to create a huge inflationary reaction that will hopefully offset the deflation we were about to see. So really it is hard to say... I think the hope is a net slightly positive inflationary period.

[PennyQuilts]

I worry that with all the printing of money that inflation will occur. That means that not only are our savings/retirements zapped by the stock market - what we have left will be worth even less.