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...]
Worried About Inflation – Consider Inflation Indexed Bonds
Inflation-Indexed Bonds (aka i-Bond)- Although inflation is currently low it is still a key concern for investors, because with interest rates at record lows and the FED promising to keep them there for the foreseeable future even a small uptick in inflation can prevent an investor from achieving a real return on investment, as returns on investment fail to beat inflation rates. If a return on investment fails to beat inflation, then in real terms you have not earned any money. You may have a larger figure for your total net worth, but in terms of purchasing power this will earn you less as the costs of living increased at a higher rate. On target Inflation is currently tracking at … [Read more...]
In 1929, Deflation Started in Europe Before Overtaking the U.S.
Marcus Aurelius was the last of the "Five Good" Roman emperors and is also considered one of the most important members of the Stoic philosophers. He ruled Rome from 161 to 180 AD. He brilliantly said, "Look back over the past, with its changing empires that rose and fell, and you can foresee the future, too." Today we may be seeing the beginning of the end of the American Empire. As Americans we don't like to think of ourselves as having an empire but according to Daniel Larison, The U.S. treats several key regions of the world as privileged space where it is supposed to have military and political supremacy, and regional challengers to that supremacy are treated as potential … [Read more...]
Inflation’s Effect on Retirement Savings
Inflation and Retirement The stock market crash of 2008 may have left you feeling a little nervous about investing your money in the market. The fear of losing everything to another recession or depression has caused many people to make “safer” investment choices, and some people aren’t even investing at all, choosing to place their money in a “high yield” savings account, instead. Unfortunately, "high yield" these days is still lower than the rate of inflation, causing you to actually lose money. Inflation Worse than a Crash Losing your money to inflation is actually much scarier than losing your money to a stock market crash. Stock market crashes are rare, but inflation is inevitable. … [Read more...]
Australia- Iron Ore, Housing and Unemployment
Speculation Mounts Over RBA October Meeting As the RBA heads towards it October meeting, there are a number of important issues on the agenda. The price of iron ore which was one of the major topics of the September meeting have now seen a 26% resurgence in price and the world’s fourth biggest exporter of iron ore, Fortescu Metals, has announced that its US$4.5-billion debt deal will now enable it to refinance any outstanding deals. The central banks in Europe and the United States have announced their intentions to fight off inflation and stimulate asset prices by printing unlimited money while China will be contributing a $150-billion package to the mix. Unemployment Despite … [Read more...]
Why Gold is a Good Investment for Inflationary Times
The Impact of Inflation on Savings If you keep your money in the bank or in money market funds, inflation can eat away at their value. Inflation can be deceiving because your account balances won’t go down. However, when you take your money out to buy something, you might notice that you won’t be able to buy as much as you used to. Therefore, if you don’t put your money into something that keeps up with inflation, you’ll soon find your savings won't buy as much. As an investor, you need to be prepared for the risk of inflation. It happens when there is too much money chasing too few goods, so prices have to go up (because of an increase in the money supply). When the economy is facing … [Read more...]
Civil Liberties Rest Upon Sound Money
Sound Money = Freedom Over the years I have written many times about the necessity of sound money to base our economy on and the results of wanton reckless money creation that will alway result in inflation and a worthless currency either sooner or later. I've told you about how inflation affects you, and how the Money Supply affects Inflation and Who Inflation Hurts the Most. I also spoken at length about the value of gold as the Timeless Inflation Hedge and how Gold is Still Money. Today, Wendy McElroy, author of The Art of Being Free shares a deep and fascinating research on all the main issues we face: the loss of security in the name of security, the state's role in strangling … [Read more...]
Be Prepared If – Inflation Gets Out of Hand
By Jeff Clark, Casey Research The cheek of it! They raised the price of my favorite ice cream. Actually, they didn't increase the price; they reduced the container size. I can now only get three servings for the same amount of money that used to give me four, so I'm buying ice cream more often. Raising prices is one thing. I understand raw-ingredient price rises will be passed on. But underhandedly reducing the amount they give you… that's another thing entirely. It just doesn't feel… honest. You've noticed, I'm sure, how much gasoline is going up. Food costs too are edging up. My kids' college expenses, up. Car prices, insurance premiums, household items – a list … [Read more...]
Will Greece Follow Iceland or Weimar Germany?
In Iceland the bankers were told to stuff it. In Weimar Germany they resorted to the printing press. Which model will modern day Greece follow?It seems that the words Weimar Germany and Hyperinflation are almost synonymous. The Weimar Republic (Das Weimarer Republik in German) is the name of the democratic government which was established in 1919 when Germany was defeated in WWI and Emperor Wilhelm II abdicated the throne. The problem came from the War repairations that were foisted upon Germany by the winners and the growing internal unrest which was allowing the Nazi's to gain a foothold. In an effort to pay their debts, promote full employment, and fight back against growing competitive … [Read more...]
What is the Significance of the Fiat Currency?
Last month in an article entitled What Is Fiat Currency? we told you that "Fiat currency is a term that is used to describe a currency which is created by “fiat” or “arbitrary order or decree” of the government." This month we would like to talk a little about the significance of Fiat currency. ~ Tim McMahon, editor. Fiat Currency Currency that is declared by a government to be a legal tender is referred to as a ‘Fiat Currency’. This type of currency owes its value strictly to the government’s acceptance of it for paying taxes and requiring its acceptance for "all debts public and private". It is not backed by reserves or any physical commodity and is defined as nonconvertible paper money … [Read more...]