So inflation in running about 3%?

The problem with "inflation running about 3%" is that the calculations have been changed over the last three decades. If the same calculations that were used in the eighties were used today inflation would be getting close to double digits.

Not to mention the fact that the Fed as increased the money supply over 600% since 2008 and when the economy does eventually pick up that fact is going to hit it like a ton of bricks. Either through much higher inflation or interest rates. If we look back to the eighties we can see a 10 year treasury was about 15%, so that is a very real possibility in the near future. What does that mean, that would be a 500% increase in the cost to service the debt, from about $360b a year to $1.8T.

Add: oh, I agree with you right now, but the outlook is, to use the recent lingo, negative. That is why during the recent "crisis" it was all many could do not to laugh since the Treasuries were hardly fluctuating at all.

Nov. 2014: Anyone dumb enough to believe inflation has been and is only 2-3% should not be allowed within 5 miles of a voting booth.

Please site your statistic. Also, Since 1997, gasoline has experienced about 400% dollar inflation, but when measured in weigh of gold, it has gotten cheaper. How do you explain that.

Not for long, wait two years.