Question:
“I’m a little afraid to buy a rental with everything going on. I’m afraid we’ll have deflation which will push rents down. What do you think?”
Answer:
I’m by no means an economist, despite a BA in Economics from UCLA. A little knowledge can be dangerous, but I’m willing to share my opinion.
The U.S. government’s uncontrolled spending can almost only be inflationary rather than deflationary.
I can give you many reasons, but I’ll just share one:
Deflation of course means that the price of things goes down. The flipside of that is that the value of money goes up (you can buy more with the same dollars).
The federal debt is some $16,400,000,000 at this writing. For the latest figure (and for a heart attack), see the U.S. Debt Clock.
There’s no way in the world that the U.S. government would let deflation increase the value of all those dollars that they owe.
So I think you can kiss any deflation fears goodbye.
