Remember four or five years ago when the housing market was strong and new housing developments and McMansions were popping up everywhere? And people in them were buying SUVs and big-screen TVs and all kinds of expensive “toys”? How can they possibly afford to do that, you may have wondered. Where is that money coming from? It can’t last. Then there came the first cracks in the market in July 2007 when reality started to settle in and people realized it wouldn’t last, although the stock market did continue higher until October 2007. Defaults on sub-prime mortgages became a trigger that brought markets back to earth as the base of the credit market house of cards was already eroding away and social attitudes started to change. The extent of the financial crisis began to unfold in 2008, accelerating in September as deflation and even depression became D words that even economists and government officials could mention. Investors with vision to position themselves for a deflationary environment did well. Just as the 2007 trigger sparked a downward deflationary spiral, did we see another demarcation line last week with the announcements of the Fed’s program to buy Treasury securities and the Treasury plan for the toxic assets held by banks? Is this the trigger that sparks the inflationary scenario that many expect as a result of the huge government funding programs around the world and the surge of money created out of thin air? The shift from deflation to inflation may not appear for a year or more, but that looks like the investment future for which investors should prepare.