It's really the big question: will we face Depression era deflation or 1970's style inflation. The answer is probably both. It looks like inflation is the current issue and don't be surprised (even though a lot of contrarians are predicting rate cuts) if the Fed does not cut rates and, in fact, has to raise rates. They won't be able to raise rates fast enough to stem the inflationary problems but they will sharply destroy the home mortgage industry- in other words, the worst is yet to come in that sector.
