- December 2011: Vol. 23 No. 11

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Why Worry About Inflation? Taking the Time to Prepare Now Will Payoff Later

by Chris Macke

With 10-year Treasury yields falling below 2 percent, ample slack in the employment market, what appears to be weak aggregate economic demand in the United States, China raising interest rates to slow its economy, and the European Union struggling mightily with sovereign debt concerns, why worry about inflation now?

You may not need to worry about inflation now, but you do need to ensure you are prepared for the inevitable return of inflation. This is especially important for institutional investors who typically hold real estate for long periods of time. When I worked for GE Commercial Finance, Jeffrey Immelt, the CEO of GE, made the following comment: “I don’t know exactly what the economy will look like next, but I will ensure we are positioned to be successful in a variety of economic scenarios.” That seems like sage advice

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