We’re in this weird “biflation” environment (blurb: http://www.newsweek.com/2010/08/16/what-is-biflation.html). Basically, if you follow commodities, there is massive inflation on the horizon due to the devaluation of the dollar. Commodities are up around 60% this year alone. Companies have started announcing price hikes.
QE2, if it’s around $1T which is what banks are begging for, will quicken that even more dramatically. This means necessities like food, gas, utilities, etc could get much much pricier in the near term. At the same time, the Fed has said it will keep rates at 0% basically forever. This means your savings account will not keep up (stocks will probably continue to rally, though).
If this happens, it will put a nasty squeeze on most everyone. Daily costs will rise, leaving less money for rent/mortgage. Salaries will likely not keep up with inflation because commodity prices will squeeze corporate profit margins.
