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...]
Roots of Our Current Inflation
The government and the FED have been making lots of excuses for the current wave of price inflation but it hasn't occurred by accident, because of oil shocks, or Russian invasions. The foundation for the current wave of rising prices was laid brick by brick over a long period of time. And because of this foundation of debt, a severe financial crisis looms not far ahead. The following article by Antony P. Mueller was reprinted by Creative Commons Permission. ~Tim McMahon, editor 05/02/2022 A Deeply Flawed Monetary System A monetary system that allows the creation of money out of thin air is vulnerable to the fits of credit expansion and credit contraction. Periods of credit expansion … [Read more...]
How Families Are Adjusting To The Crazy Inflation Rates
On April 12th of, 2022, the U.S. Bureau of Labor Statistics (BLS) announced that the annual US inflation rate had reached a record high of 8.5%, a level not seen since December 1981. This level of rapid price increase is being felt all over the nation and even in Europe. Those with low incomes are having the hardest time adjusting to the rapidly increasing cost of living, as is often the case. But working families across the nation are also being forced to adapt and change in order to cope with rising prices. This has impacted every corner of our society, from gas to prices at the grocery store. Adjusting to this level of inflation hasn’t been easy, and here is how some families are looking … [Read more...]
How To Invest In Cryptocurrency: 4 Tips For Beginners To Get Started
Despite bouts of volatility that tend to scare away risk-averse investors, cryptocurrency is more popular than ever, with millennials hoping to cash in on its explosive growth. While legacy coins such as Bitcoin and Ethereum are still the most popular currencies in the world of crypto, other emerging altcoins are gaining momentum and popularity. If you have been living under a rock and have no idea where to get started in your crypto journey, keep reading to find four steps to get started: 1. Pay Attention to What You're Investing In In addition to having your finances in order, when investing in crypto, be mindful that, unlike stocks, most cryptocurrencies are not backed by any … [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...]
The History of Inflation in the United States
By John Steele Gordon Author, An Empire of Wealth: The Epic History of American Economic Power Money is just another commodity, no different from petroleum, pork bellies, or pig iron. So money, like all commodities, can rise and fall in price, depending on supply and demand. But because money is, by definition, the one commodity that is universally accepted in exchange for every other commodity, we have a special term for a fall in the price of money: we call it inflation. As the price of money falls, the price of every other commodity must go up. And what causes the price of money to fall? The answer is very simple: an increase in the supply of money relative to other goods and … [Read more...]
How Inflation Helps Some and Hurts Others
Inflation is NOT monolithic i.e. it doesn't affect everyone equally. This has been known since the 1700s when Richard Cantillon, an Irish-French economist, author, and banker, wrote a treatise explaining the Missippi Bubble and the Tulip Mania. We first discussed this issue in an article entitled Who Does Inflation Hurt Most? In the following article, Mark Thornton looks at the effects first postulated by Richard Cantillon and how inflation helps some and hurts others. ~Tim McMahon, editor. Cantillon Effects: Why Inflation Helps Some and Hurts Others By Mark Thornton We now turn our attention to what happens with an increase in the money supply rather than an increase in savings. … [Read more...]
Don’t Blame Putin for High U.S. Inflation… Yet
With Annual Inflation reaching 40-year highs in February, the current administration is frantically searching for a scapegoat... any scapegoat no matter how absurd... to deflect responsibility for the current high inflation rate. First, inflation was "transitory"... then when it was obvious it wasn't... it was supply chain disruptions, and when that narrative fell apart, along comes Putin... Well, inflation was a problem long before Putin invaded Ukraine. So although the "Putin Effect" might result in HIGHER inflation soon, it hasn't been the cause of inflation in the February 2022 inflation numbers. In today's article, Ryan McMaken looks at this issue. ~Tim McMahon, editor Price Inflation … [Read more...]
