Whether Deflation or Inflation, Things Are Going to Change

Breaking Bank of America News
This story came online as I wrote this, so I thought I would offer my two cents on it (link for Zero Hedge edition of saying goodbye):
Ken Lewis is Gone
Mr. Lewis will leave BAC by year's end (that soon?) and if it seems rushed to you, then you think like me.

This is some kind of ploy to take the heat off all the legal cases involving the BAC/MER deal. Sadly I think it will do just that. I am not a legal scholar and have no idea how this will affect things, but politically the heat will not be turned down on anything involving BAC over the past year. Which is too bad.

Whether Deflation or Inflation, Things are Going to Change
Trolling around the financial world I was overwhelmed with the continued raging debate over deflation, inflation, or some monster born from the two. I have covered that debate too many times to really wade in again. To be honest, we are just not going to know the real answer for some time (think 5 years out) so a daily grind of data points is wearing me thin.

What cannot really be debated is that our system is going to change because of the financial crisis made possible by a careless government and reckless banks armed with liquidity which had no end. If we can all agree on that, I think that may be a good start.

I think my favorite part of the deflation/inflation debate is that you, the ordinary person, will find the real world effects almost identical to your daily life. I think most of the emotion about this area of contention is the belief that one may be able to position themselves in such a way to be insulated (to whatever degree) should either scenario unfold in earnest. On that, allow me to offer some advice.

If you are extremely well to do, or rich, then forget all this stuff and carry on. In a major deflationary episode you will either be in control of hard assets (which no one can buy) but will have utility and cash that has gained a significant amount of purchasing power (which you will not want to spend). If we enter a major inflationary phase, you are already way ahead of most chasers, and can buy hard assets for protection and move your value losing cash into another vehicle.

If you are the other 90% of the population, you will just have to do the best you can.

I stand by this call. In deflation, everything costs less and dollars are worth more as spending falls off a cliff. Of course, so does wages, so with less dollars that will buy more, you are struggling to get what you need. In inflation, everything costs more, and you of course will get paid more in dollars that will buy less, so again you will struggle to have what you need.

What's the debate?

Economic Disconnect prides himself on the very keen observations of the readership that frequent the site. If you would like to add to this debate, here is the question that may change the debate to more real world terms:
-If you only had $20,000 today, in what way would you try and prepare yourself for;
A) Deflation
B) Inflation

That's it. $20k. No leveraging the house, no liquidation of your entire net worth, just $20k. And no poking at people that "should have saved more in their life", they did not so it is not relevant. I might add that $20k is far beyond the immediate cash position of many, many families and individuals.

I look forward to the ideas.