so what is "joe , the plumber/saleswoman , teacher ... " going to do if there is a little many left over after paying for the mortgage/ rent , food , transportation ?
where to invest it ?
there is (talk of ) a recession , deflation and even hyper-inflation competing for the attention of the small investor .
we took some of our money and bought a new car after the old one started giving us trouble after nine years of service ( the old one was an oldsmobile intrigue , the new one is a honda accord ) .
we actually paid quite a bit less for the honda than we paid for the olds nine years ago - and the honda uses less gasoline !
perhaps we should look carefully at some home-improvements that would enhance the resale value of the house .
some 30 years ago we put some money into home upgrades that have served us well . canada's economy was in a slump at that time and there was high unemployment . a plumber friend charged us $10 an hour for plumbing work (second bathroom) and only $7 for non-plumbing work (putting in a rec-room) .
we'll see what the situation is next spring . perhaps there may (or may NOT !) be some money left over in the kitty .
and here is part of the article that talks about : recession , deflation and hyper-inflation - all in one breath . an articele in a respected german newspaper made me look for it in canada's Globe & Mail .
What's happening? Recessions are deflationary. In deflationary environments, cash is the one asset that must increase in value " since the price of other assets must fall against it. Deflation is usually defined as a decline in prices caused by a reduction in either the supply of money or in the supply of credit. On the one hand, the world is awash in money. On the other hand, it is effectively bereft of credit.
Long-term forecasts of U.S. hyper-inflation may prove correct. As Warren Buffett observed the other day, the U.S. dollar makes a terrible long-term investment. (A very patient investor who held a dollar bill for the past 100 years would now have an investment worth 5 cents.) But this is also true for other printed currencies. The credit crunch crises nevertheless show that there's still something special about the greenback in times of trouble. It is surely instructive that Mr. Buffett held on to U.S. dollars in his personal portfolio " at any rate, until he sold U.S. dollars last week to buy U.S. equities.