Friday, May 18, 2012

Financial Barometer Indicates Heavy Weather Ahead via the Blog of the Real Estate Center

A few Americans are worried about deflation. A lot of Americans are worried about inflation. Some Americans are worried about hyperinflation.

The Federal Reserve is clearly worried about deflation. That’s why your CDs and money market accounts have earned virtually nothing for the past three years. That’s why they are unlikely to earn anything for another two years, at least. Quantitative easing (QE) is the snappy way to say that the Fed prints money and then buys something with the new money. QE is the Fed response to fears of deflation. As long as interest rates are near zero, the Fed is worried about deflation.

Almost everyone in America is worried about inflation. They see it every day when they go to the grocery store. They see it every day when they see the posted price for gasoline. Insurance costs are higher. So are medical costs.

Read more...Financial Barometer Indicates Heavy Weather Ahead | the Blog of the Real Estate Center

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