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Let’s hope he’s wrong

July 18, 2015

This is not the first time I’ve heard Mr. Schiff talk about this topic, so his prediction of inflation isn’t news. But it always leaves me wondering how the U.S. debt will be handled. (I’m not talking about the deficit, but rather the total debt of roughly $18 trillion.)

This is a particular concern to those of us who are retired or close to retirement. In the last several years it’s been very difficult to find an investment with low risk and a decent return — where ‘decent’ means a couple of percentage points above the inflation rate.

I suppose we could all buy junk bonds, keep our fingers crossed, and hope for the best.

If the inflation rate jumps up into the 10-15% range, as it did in the 1980s*, there’re going to be a lot of unhappy oldsters. And maybe a lot of unhappy youngsters, too, as the older folks figure out they need to keep working or return to work.

*When I bought my first house in 1984, the mortgage rate was 13.5%. And that was an adjustable rate note with a 17.5% cap; it was the best deal we could find at the time.

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