Click for Larger Image It's not just the United States that is suffering from high inflation, countries worldwide are experiencing higher than average inflation. This is partially due to the global pandemic but even more the result of the actions taken by central banks in response to the pandemic. In this article, we will look at global inflation rates by country and inflation around the world. The World Inflation Rate The average inflation rate around the world is 7.4%. The global inflation rate surged from 4.35% in 2021, and 3.18% in 2020. Jump to: Countries with the Highest Inflation Rates Countries with Hyperinflation Russian Inflation Inflation in Europe EU … [Read more...]
Analyzing 5 Ways You Can Hedge Against Surging Inflation
Inflation in the U.S. has reached levels not seen since the 1980s. That means that millennials have never seen inflation this high. Consequently, they are probably unaware of not only how devasting inflation can be, but also about the best ways to hedge against surging inflation. Simply stated, inflation ravages purchasing power, and the higher the inflation rate, the quicker purchasing power is destroyed. Even if you receive a cost of living (CoL) raise it is usually "too little too late" just like the FED's recent attempts to fight inflation. The reason a CoL raise doesn't help much is because it is a lagging entity. In other words, even if you get a raise equal to the actual level of … [Read more...]
April Inflation Down, But…
The Bureau of Labor Statistics reported that in April 2022, Inflation fell to 8.3% Inflation Summary: Annual Inflation Declined from 8.54% in March to 8.26% in April CPI Index rose from 287.504 to 289.109 Monthly Inflation for April was 0.56%, down from 1.34% in March The next release is on June 10th April 2022 Annual Inflation was 8.26%. Jan. 2021 -- 1.40% ** Jan. 2022 -- 7.48% ** Feb. 2022 -- 7.87% ** March 8.54% Gasoline prices were artificially lower due to a massive release from the Strategic Petroleum Reserves (SPR), which temporarily pushed inflation down in April. The International Energy Agency was not happy that the Biden administration didn't warn them that it … [Read more...]
March Inflation Highest Since 1981
The Bureau of Labor Statistics reported that in March 2022 Inflation Hit 8.5% Inflation Summary: Annual Inflation is the highest since December 1981. CPI Index rose from 283.716 to 287.504. Monthly Inflation for March was 1.34% up from February's 0.91% The next release is on May 11th March 2022 Annual Inflation was 8.54%. Jan. 2021 -- 1.40% ** Jan. 2022 -- 7.48% ** Feb. 2022 -- 7.87% Higher Gasoline prices pushed inflation to new heights in March 2022. The last time inflation was higher was in December 1981 when it was 8.92% but then it was declining from the March 1980 peak of 14.76%. Although we calculate it to two decimal places the Bureau of Labor Statistics … [Read more...]
Does the CPI Exclude Mortgages or Rent?
I recently got the question, Why does the CPI exclude rent? So I'm answering that here. The Consumer Price index doesn’t exclude rent. It actually has an entire section entitled “Shelter”. But not everyone rents... some people actually own their own homes. So to cover everyone they created a sort of hybrid rent/ownership component to the CPI called “owner’s equivalent rent”. According to the Bureau of Labor Statistics who calculate the CPI, “The expenditure weight in the CPI market basket for Owners’ Equivalent Rent of primary residence (OER) is based on the following question that the Consumer Expenditure Survey asks of consumers who own their primary residence: “If someone were to … [Read more...]
February 2022 Inflation- 7.9%… Is 11% Next?
The Bureau of Labor Statistics reports February 2022 Inflation Hits Another Record High. Inflation Summary: Annual Inflation highest since January 1982. CPI Index rose from 281.148 to 283.716. Monthly Inflation for February was 0.91% The next release is on April 12th February 2022 Annual Inflation was 7.87%. Jan. 2021 -- 1.40% ** Jan. 2022 -- 7.48% ** Feb. 2022 -- 7.87% Inflation soared again in February 2022. The last time inflation was higher was in January 1982 when it was 8.39% but then it was declining from the March 1980 peak of 14.76%. Although we calculate it to two decimal places the Bureau of Labor Statistics reported February's inflation rate as 7.9%. BLS … [Read more...]
How Should You Invest to Benefit From Inflation?
We've been a bit spoiled over the last couple of decades because inflation has been relatively tame. The first thing to remember about inflation is that it is primarily a loss of purchasing power. That means that to keep up with inflation, you need to have "more money" in other words, with 7.5% inflation, you have to have $107.50 next year to be able to buy the same thing you could buy for $100 this year. So the first rule of inflation is "don't lose purchasing power". But unless you can earn at least 10% on your money, you are probably losing ground. Why 10%? Because you still have to pay taxes on your gain. If you invest $100 and make 8% i.e. $8 and then have to pay the government 20% … [Read more...]
Hyperinflation in Turkey and Argentina Today?
The Massive Gap Between Official Turkish Inflation and Reality The Turkish economy is a trainwreck. Labor is constantly striking for higher wages because inflation is so high. According to the Labor Studies Group, at least 56 worker strikes broke out in Turkey between January 12th and February 10th, and last year the Turkish currency lost 40% of its value against the U.S. Dollar. Interestingly, contrary to all mainstream Economists, Turkey’s President Erdogan insists that lower interest rates fight inflation. So he has kept interest rates artificially low, making the situation worse. Turkey’s falling exchange rate creates a problem for Turkish businesses that get their revenues in lira and … [Read more...]
January Inflation Nears 40 Year High
The Bureau of Labor Statistics reported Another Record High Annual Inflation Rate in January. Inflation Summary: Annual Inflation highest since February 1982. CPI Index rose from 278.802 to 281.148. Monthly Inflation for January was 0.84% The next release is on March 10th Annual Inflation for the 12 months ending in January was 7.48%. Jan. 2021- 1.40% -- Jan 2022- 7.48% 2021 Inflation Rates Feb 2021 1.68% -- June 2021 5.39% -- Dec. 7.04% Inflation soared from January 2021 to January 2022 reaching an almost 40 year high. The last time inflation was higher was in February 1982 when it was 7.62% but then it was declining from the March 1980 peak of 14.76%. As you … [Read more...]
Former Treasury Secretary Larry Summers on the Current Inflation Situation
Larry Summers was the 71st United States Secretary of the Treasury from 1999 to 2001 under Bill Clinton and Obama’s head of the National Economic Council from 2009 to 2010 and the president of Harvard University (2001–2006), so he might know a little about inflation. Recently he is quoted as saying that although there are some “transitory” components of the current inflation situation, we are also “moving towards higher entrenched inflation”. One of the factors he mentioned was “expectations,” which we have discussed in previous articles. When expectations of higher inflation start, it becomes almost a “self-fulfilling prophesy” because employees fight for higher wages expecting their … [Read more...]
