Inflation is a lagging metric. Inflation of 8%, means prices today are 8% higher than compared to a previous time. Holding onto cash when inflation is at 8% would be the good option, provided prices drop in the future (ie you're not losing 8% on holding your cash currently when inflation reads 8%, rather it's cash compared to last year which has lost 8% if you spend it now). As to whether we'll get inflation or deflation in the future, look to the Fed, they are the biggest market participant.