Yeah Virginia, there is inflation

Finally, an article acknowledging the obvious. Food inflation is rampant. And contrary to what our government thinks, real estate prices going down doesn't offset food prices going up. Both are bad (if you're a homeowner, but regardless it doesn't really offset food prices). Nor does it make sense to cut out food and energy and only keep track of say, decorative birdhouse and throw rug and house paint prices. What is someone more likely to have to buy, food and energy or birdhouses?

On a different note, here is a cheery forecast, quite similar to mine, about the near future:

The good news is that you've still got your health. The bad news is absolutely everything else. We are on the threshold of five years of pure economic hell, featuring 1) a worsening of credit bubble deflation as it proceeds domino by domino ever closer to credit system collapse; 2) a series of stunning, stair-step down, stock market "crashes"; 3) continued real estate deflation featuring a relentless "grind-down," followed by an additional, sudden 30-40% value smackdown at some point; 4) a resumptive pimp-smacking of commodities prices (and pretty much anything else one might consider an asset); 5) a coming "crisis of liquidity" (little savings, lost equity, wage deflation) which for most will translate to "we have no money"; 6) progressively eroding economic indicators including another doubling of the unemployment rate; and 7) an inevitable bond crisis that will translate to rapidly ascending interest rates and sudden and severe asset value loss.

"But if the real estate bottom isn't in, Steve, how low will it go?" Since my residential and commercial real estate predictions have been on point for five years now, I receive numerous emails asking me if the real estate bottom is in. The answer is an emphatic "no". Unfortunately, we are still several years away. The likely bottom will occur once the mother of all bursting bubbles (the inevitable U.S. bond crisis) forces interest rates up to at least 18-20% and brings real estate transactions to a virtual standstill. Ultimately, I expect values to decline to 1974-1982 levels, so anyone with considerable liquidity will find buying property at the nadir to be like shooting fish in a barrel. Of course you'll need cash.

Other signs the bottom will be near: Rural and some suburban ghost towns, scores of bankrupt and abandoned high-rise condominium developments worldwide, and government bulldozers leveling entire neighborhoods in an attempt to lessen the effects of rampant oversupply and blight.

Full article