In September Druckenmiller suggested inflation could reach 10%, as reported, via Bloomberg:
“The markets are in a “raging mania” and rising inflation is a big threat, investor Stan Druckenmiller said. Inflation could hit 5% to 10% in the next four to five years, Druckenmiller said Wednesday in a CNBC interview, adding that the Federal Reserve has created conditions that have sent valuations soaring. Deflation is also a risk, he said. “Everyone loves a party but inevitably after a big party there is a hangover,” he said. “We are in a raging mania.”
He may or may not be right. But how long have we lived with low rates of interest and low inflation? At some stage, inflation will impact portfolios. The good news, it’s unlikely to be overnight. But that shouldn’t stop everyone reviewing their plans to think about what action to take if or when inflation DOES become something serious to act upon. It is time now to think and plan. We all know inflation is coming; we just don’t know when.