Do you ever listen to or watch Glenn Beck? He makes a pretty educated and serious guess that in about 2-3 years we'll be facing hyperinflation. He recommends buying things at today's prices that you know you'll need in the years ahead or that you can trade when money becomes meaningless.
I know that's rather gloomy but its the kind of adivce that doesn't hurt to follow, but could hurt if you don't - and its what we'd do if we were not so strapped. 
And as an update: federal refund direct deposited on Friday and enabled us to make this month's mortgage payment. DH continues to look for work. So glad that we'll soon have an extra $13 a week in my paycheck; that'll make a huge difference. 
@Math_Rocks wrote:Do you ever listen to or watch Glenn Beck? He makes a pretty educated and serious guess that in about 2-3 years we'll be facing hyperinflation. He recommends buying things at today's prices that you know you'll need in the years ahead or that you can trade when money becomes meaningless.
I know that's rather gloomy but its the kind of adivce that doesn't hurt to follow, but could hurt if you don't - and its what we'd do if we were not so strapped.
And as an update: federal refund direct deposited on Friday and enabled us to make this month's mortgage payment. DH continues to look for work. So glad that we'll soon have an extra $13 a week in my paycheck; that'll make a huge difference.
Well, economists differ on the risk of deflation in the near term (they're not sure whether this stimulus was enough cash, soon enough, to avert a deflationary period), but most indeed seem to think serious inflation is coming once the recession has ended, for many reasons including the following:
- All the money being pumped into major economies (monetery stimulus by central banks and fiscal stimulus by politicians) will still be there when the turnaround finally happens, just as after a fire has been put out the water does not instantly vanish. We clearly need emergency interventions right now to prevent another Great Depression, but those interventions will have a cost.
- When the recovery does begin it will probably be slow and tentative, so central bankers will be very very hesitant to start tightening the money supply and raising interest rates for fear of plunging economies back into recession.
- By far the most politically acceptable way to deal with the levels of national debt major governments are likely to have when this recession is over will be to let inflation reduce their real value; just about every government in modern history facing such large debts has ended up choosing inflation over less politically-palatable alternatives.
- Major structural change in an economy, as we are likely to require, is dramatically easier in an inflationary environment because allowing budgets and pay scales to be shrunk indirectly by keeping increases below inflation is much easier than actual cuts.
I don't know how long or how bad our inflationary period will be, though my personal guess is roughly a doubling in the CPI over roughly a decade.
We're going to end up owing about 5k because we had waaaayyyy more income last year than normal due to DH's retention bonus/severance package. Coincidentally, that's about the amount we have in savings, since most of that income was sunk into a down payment for our new house. I really don't want to wipe out our savings to pay the tax man, especially in this economic environment, so I'm thinking about getting a loan or taking a CC cash advance to pay it...both of which stink to high heaven because we're trying to work our way OUT of debt, not INTO it. 
We received about $5200.00 because we pay in extra so we don't ever owe Uncle Sam. Have spent about 400.00 and have the rest in savings. Will be taking the big plunge and apply for a mortgage next week so we need that sitting nicely in the bank. 