by Darrell Moody
Even though many economists are expecting 2010 to be the end of the current economic recession, concerns over inflation are growing.
Randall Holcomb, an economist at Florida State University is among those worried about inflation. Holcomb said that unprecedented deficit spending could doom the recovery.
"If we're running deficits that are in the neighborhood of 10 percent of the national debt, 10 percent inflation would just offset that. So it wouldn't surprise me if we saw some inflation in the upcoming years," Holcomb said.
Holcomb said Florida's economy could be stagnated by inflation for the next 10 years. He also warns against investors putting all of their money into bonds as an alternative to the stock market.
"After the stock market collapse over the last couple years, a lot of people are thinking they need to keep their money in some safe place like bonds and those are just the kinds of assets that get killed during inflation," Holcomb said.
There is however a silver lining to Holcomb's prediction, he said he expects Florida's job market to improve.
"Even if it slips up a little bit, I'm expecting unemployment to go down slowly over the rest of the year," Holcomb said.
For the more than 1 million Floridians looking for a job, Holcomb's forecast is welcome news but nobody really knows how long it will take for the economy to make a full recovery.
© 2010