Sometimes, you might not have as much money at the end of the month and you don’t really know why. It could be inflation. Learn how inflation increases hurt everyday life.
What is Inflation?
Economists differ over the exact causes of inflation, but give the rise in prices, this appellation. In the United States, the Consumer Price Index (CPI) is used to measure these price increases. For individuals, inflation is the rise in the price of a bag of rice, box of cereal or 12-pack of soda pop.
For some reason, inflation might rise at the same time. It could be due to drought in the primary agriculture areas or rising gasoline prices. These can make it more expensive to ship food to your local grocery store.
Businesses don’t pay for rising costs. You do. That is why you might feel the pinch on your budget.
Losing Purchasing Power
Inflation increases hurt everyday life by destroying your purchasing power. Instead of being able to purchase all of your groceries for $100, you need to spend $200. How do you make that money up?
You can’t work more than 24 hours per day. You might not be able to get more hours at work. You might need to cut back.
After the 2008 Sub-Prime Crisis, the United States government lowered interest rates to ZERO percent (ZIRP). This was intended to spur economic activity. But, in 2018, many experts are warning of higher interest rates.
Neither businesses nor the government pay for inflation. Unfortunately, you do. So, what do wise investors do to mute inflation’s negative impact?
Gold the Inflation Hedge
Investors can buy gold to have an asset that acts the same way as your consumer goods. Gold is a commodity, just like orange juice. What that means is that as inflation rises, gold will also rise.
Instead of falling behind by so much, your gold will help you catch up. It is like a turbo boost engine. Gold compensates for lost purchasing power.
The US Money Reserve has coins, bars and other ways for individuals to purchase gold. You can’t stop inflation, but you might be able to mute its impact with gold in your wealth portfolio. US Money Reserve gold rises as inflation rises and has been a great inflation hedge since the dawn of time.
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