Inflation Outlook

Going forward, on January 20, 2009 Obama will be inaugurated. The U.S. is already running a huge budget deficit. Excluding the $700 bailout plan and the automakers bridge loans, Obama plans to enact a stimulus package and spend on infrastructure to create jobs. Essentially, spend our way out of recession to return to a prosperous economy. With my basic knowledge of macroeconomics and history on the economy under former presidents, spending and increasing the budget deficit will increase money supply and cause inflation with also should yield high commodities.

At the most by 2018, enough time for the stimulus to substantially work its way through the macroeconomy, the economy will experience high inflation or another recession for the low fed rates, bailout plans, stimulus package, infrastructure spending foreshadows what’s to come.