Planning for retirement is difficult enough without having to worry about inflation. There is a lot to consider when you stop working a regular job. Do you plan on living where you are now. Do you want a change of scenery? Would you prefer a place with less maintenance or a place where you can have a big garden or a workshop where you can build things? There of course the financial aspects to consider as well. Will your retirement savings be adequate to provide the type of lifestyle you desire? There are a variety of Retirement Planning Calculators that can help you try to figure out how much you will need to save to have a happy retirement. You need to estimate your expenses once you are … [Read more...]
The Secret Word: Deflation – And the Next Five Years of Financial Turmoil
The following is a sample from Elliott Wave International's new 40-page report, The State of the Global Markets - 2013 Edition: The Most Important Investment Report You'll Read This Year. This article was originally published in Robert Prechter's July 2012 Elliott Wave Theorist. In the first five months of 2012, there were 20 times as many Google searches on "inflation" as there were on "deflation." This is down from a ratio of 50 times in June 2008. If any theme has been overdone over the past six years, it is the theme of inevitable inflation if not hyperinflation. Inflation reigned for 75 years, from 1933 to 2008. People are so used to it that they cannot imagine the opposite … [Read more...]
Costs of Inflation in Business
The current UK inflation rate is 2.7 percent. So what does this mean? The term inflation refers to a general rise in the price of a goods and services. This means the price of a basket of goods this year are, on average, 2.7 percent more expensive than last year. See Also: What is the Real Definition of Inflation? Costs of Inflation Most countries adopt a inflation targeting policy; for example, the Bank of England targets the inflation rate at 2 percent. Generally, governments prefer inflation so they can repay their debts with money that is worth less. If they had their way they would inflate their debts away at a much higher rate than 2%. So why is high inflation deemed a bad … [Read more...]
U.S. Foreign Exchange and The Chinese Currency Exchange Rate
U.S. Foreign Exchange The number of international corporations and financial professionals that follow the ever-changing ratio of U.S. dollars to Chinese Yuan has increased and expanded beyond its borders. This is an indication of just how critical the trade relationship that binds the world's two largest economies has become. Although the relationship between the United States, Canada and Mexico continues to be even more robust than the Sino-American arrangement, the consumer economy of the United States is heavily dependent upon smooth flows of goods from the workshops of China to the Pacific ports of California and Washington State. In many ways, the continued harmonious economic … [Read more...]
Gargantuan and Growing: The US Debt Figure You’ve Probably Never Heard Of
The widely reported $16.1 trillion federal US debt is a drop in the bucket Financial transparency is a must for U.S. publicly traded companies. But if the federal government had to abide by those same regulations, more Americans would know that the often-reported $16.1 trillion federal US debt doesn't come close to the truth about the nation's liabilities. In a Nov. 26 Wall Street Journal opinion piece, a former chairman of the Securities and Exchange Commission and a former chairman of the House Ways & Means Committee write: The actual liabilities of the federal government -- including Social Security, Medicare, and federal employees' future retirement benefits -- already exceed … [Read more...]
Australian Banks Rated As Low Risk
Australian Banks and Economic Environment Positive In a world analysis Australian banks have been found to pose a low degree of risk to the global financial system. According to Dr Robert Engle, the 2003 winner of the Nobel Prize in Economics and a professor of finance at Stern School of Business at New York University, the Australian banking system is robust and capitalized enough to endure another financial crisis. He said the economic environment was positive from an Australian perspective and that the liquidity measures that had been implemented were proving to be effective. The comments were made as part of Dr Engle’s presentation on systemic risk within the worldwide financial … [Read more...]
What are “Foreign Exchange Reserves”?
Will the U.S. Dollar Be Replaced as the World's Reserve Currency? Foreign Exchange Reserves are foreign money held by International banks for use in international trade and in an effort to diversify their holdings and hedge against the inflation of their own currency. The most common items bought and sold with their foreign exchange reserves are oil and gold. Up until 1944 the asset of choice was gold and it was used as the medium of exchange between countries to settle their debts. But in July 1944, delegates from the 44 Allied nations gathered in Bretton Woods, New Hampshire., and made the U.S. dollar the reserve currency of the world. At that time, the dollar was pegged at $35 per ounce … [Read more...]
Producer Price Index (PPI) and Consumer Sentiment Index Point to Deflation
Two Signs That Deflation is Far From Over Producer Price Index (PPI) turns south The federal government defines the Producer Price Index (PPI) as "the average change over time in the selling prices received by domestic producers for their output." With help from the Federal Reserve's massive inflationary policies, the PPI has climbed even as the economy began to fall in 2008-09. All the while, the financial media persisted with stories of an economic recovery. EWI analysts offer an independent perspective. The New York Times declares, "Economic Gloom Starting to Lift." Corporate America, however, is not so sure. This chart of producer prices [wave labels removed] probably … [Read more...]
Cost of Living – Fish and Chips
Cost of Living Fish and Chips Fish and chips still remains the favorite take away meal in the UK despite fierce competition. The exact origins are unknown but it has been established that chips arrived from France during the 18th Century. There was also mention of fried fish and bread in ‘Oliver Twist’ by Dickens, published in the 1830s. The Oxford English Dictionary claims the earliest usage of "chips" in this sense was in Charles Dickens' A Tale of Two Cities (published in 1859). Fish and chips became standard fare among the working classes in Great Britain due to the efficiency of trawl fishing in the North Sea, and the development of railways which allowed fresh fish to be rapidly … [Read more...]
Cost of Living
The cost of living or (COL) varies from state to state and city to city and even from neighborhood to neighborhood. Some areas have seen housing costs decrease dramatically in the years since the housing bubble popped in 2008, while others have only fallen slightly. But the Cost of living is more than just housing costs it is the amount of money it will take to maintain the same standard of living in various places. Changes in the COL over time are often calculated via an index such as the CPI index that sets costs at a certain date at 100 and then recalculates costs at intervals. COL calculations are also used to compare the cost of maintaining a certain standard of living in different … [Read more...]