As the global death toll rockets past 50,000, with governmentspredicting much worse to come, it is reasonable that many will find such mercenary thinking odious.

But whether we like it or not, many ordinary Canadians, including homeowners and people close to retirement, are anxious for advice on what the fallout from the current pandemic will mean for their future finances.

Right now, everyone is thinking about the dire state of the economy as people are thrown out of work. But once the effects of the pandemic begin to wane, there are fears in some quarters that the massive government spending could lead to inflation. That would mean a confusing and uncertain outcome.

After more than a decade in which official measures of rising prices showed inflation close to zero, a return to rising prices, and the rising interest rates that central banks have traditionally used to contain them, could well upend the way we think about money and investment.

More money to spend

Not only are central banks lowering rates and buying up bonds in the hope bond holders do something else with the money, governments around the world are spending trillions of dollars they don’t have to keep households and businesses solvent.

«Let’s just call this simply what’s going on. We’re printing a lot of money to provide liquidity in the system,» former Bank of Canada governor David Dodge told David Parkinson at the Report on Business last week.

While Dodge agreed that the Bank of Canada’s plan to pour money into the economy withquantitative easing (QE) was the right thing to do, he said there will be consequences.

QE may be hard for most people to grasp intuitively, although some of us will be familiar with the term from when the U.S. and Europe flooded markets with cash to prevent the 2008 credit crunch from spiralling into something worse.

In an era when almost all money consists of digits in computers, when the Bank of Canada’s Stephen Poloz began QE last Wednesday, he wasn’t actually «printing» $100 bills. What the bank did was conjure a billion dollars into existence and used it to buy bonds on the market.

«It is the last best trick our governments have to save the good ship economy,» economist Armine Yalnizyan once told Michael Enright on CBC Radio’s Sunday Edition in an explanation of QE that stands the test of time.

But, of course, the Bank of Canada is not the only source of cash flooding into the Canadian and world economy.

A flood of cash

Governments around the world are borrowing from the future and running up deficits at levels not seen since the Second World War as they hand out emergency aid to businesses andordinary people.

In the short term, with so many people out of work and whole industries in contraction, inflation is the least of our worries.

One of the reasons for all that government spending is to prevent the exact opposite of inflation — a spiral of deflation. Aggregate prices could fall because of the crash in demand as people stop buying, not just gas and plane rides and cars and houses, but the industrial inputs that go into their creation.

Most economists worry that deflation is much worse for an economy than inflation because, rather than spending their money, consumers can benefit by holding off until prices are lower, leading to even lower demand.

But like everything else about this unprecedented pandemic and the unprecedented government reaction, it is not entirely certain what the longer term effects will be.

Bazookas have been fired

«Though it seems like deflationary end times to some right now, the COVID-19 scare is going to pass, and we will be left with monetary and fiscalbazookas having been fired,» worriesmarket analyst Gary Tanashian on the site Seeking Alpha.

Once a government has started pouring stimulus money into an economy, it is notoriously hard to start pulling it back out again, especially, as in the U.S. case, during a presidential election year. Similar forces will be at work in Canada where, because of the Liberal minority government, an election could happen at any time.

Tanashian suggests the inflation is already happening now, but is disguised by the temporary COVID-caused crash in demand. And once the lockdown begins to lift and everyone roars back to working and shopping and eating out, there will be too many dollars chasing too few goods and services. And that’s the classic definition of inflation, which he sees showing itself by the end of 2020, and surging over the next two years.

If we do see a return to inflation, it’s hard to predict how it will play out. But central banks likely will start raising rates to keep it in hand.

Existing bonds, a great investment over the past decade as interest rates fell lower and lower, will no longer be good to hold. The value of assets such as housing will fall as borrowing costs rise. Outstanding consumer loans will become a bigger burden.

Employment incomes that rise with inflation will be a better source of money for the working young than cash piles held by the rich and old. Spending money now will be better than waiting, because the price of things you want will go nowhere but up. And a generation who’s never seen it will have to figure out inflation all over again.

Follow Don @don_pittis