If the housing market is going to collapse if interest rates go up, what is going to cause inflation? Wasn’t the ‘problem’ in the 1970’s wage inflation? What is going to cause wage inflation today?
I think we are more likely to see deflation. Governments, both local and the United States Government are cutting back. Businesses have found that they can make more money than ever by not hiring and getting more out of the staff they have.
iPhones were $600 in 2007 and you can buy them new today for less than $300. Lending standards are getting tighter.
I can see there being inflation in food and energy, but the cost of most goods is deflating (cars, houses, electronics, furniture, etc.)
