RE: Oh and I forgotIvana has quite a way with words but there is a lot of truth in the message.
With every country in the developed world printing money like its going out of style, we should experience severe inflation either now or in the near future under just about any economic theory you espouse - so why aren't we?
CPI understates actual inflation. I would argue that this is deliberate since government (who calculates and publishes the number) has a vested interest that it is stated to be low - since so much of their non discretionary spending (pensions etc) are inflation linked.
Do you honestly believe inflation is below 8 or 9%? Food, petroleum, utility, car maintenance including insurance prices are up well beyond this and constitute a large portion of expenses. In Ontario OHIP does not cover nearly what it did even 10 years ago. But this is small potatoes.
Inflation is basically the rate at which a currency debases. With all major currencies that have rates that float, printing money like there is no tomorrow there is no one point of reference. Except gold and possibly to a lesser extent, silver. Ivana is perceptive when stating that an ounce of gold does not inflate even over centuries. This is unlike every other paper currency. Gold is appreciating and will IMO continue to appreciate against all currencies.
House prices would absolutely fall (and by a fair bit IMHO) if mortgage interest rates were at a more normalized amount.
Although I'm not personally not particularly bullish on gold miners at this stage of the cycle, gold itself will do very well for the forseeable future. Whether the bank stocks can run fast enough to stay ahead of true inflation, we will see.