Inflation does not seem highly likely in the near term especially considering that the deleveraging process for corporations and consumers alike will be a multi-year process.

With 20 percent of homeowners underwater, the most popular money tap in recent years, home equity, will be almost non-existent for quite some time.

While higher food and energy prices are inflationary, they also cut into the consumer’s spending on non-essential goods and services.

Of course, as long as the Fed has the power to print money, the long-term trend is inflationary. With large amounts of money being printed now, a higher relative level of inflation seems almost impossible to avoid… just not any time in the near future, which brings us back to your operative word, “eventually.”

“As life closes in on someone who has borrowed far too much money on the strength of far too little income, there are no fire escapes.” ~ John Kenneth Galbraith