Inflation. It often seems like some sort of financial term that only investors and banking magnates would ever need to worry about. However, inflation is a lot more important than many would think and has a far greater effect on the average person than most realize. It’s one of the most important measures of economic strength and stability, and currently sitting at 2.1 percent, it has a few market-watchers worried. Is there a reason to worry though? The U.S. Money Reserve takes a hard look at the facts and presents us with a breakdown of how the inflation rate can affect the average consumer’s spending, and what the current rate could mean.
What is Inflation, and How Does it Affect the Economy?
The inflation rate is, put quite simply, the average rate at which the prices of everyday goods and services increase or decrease. An inflation rate higher than zero percent means that, on average, you’ll be spending more over time on goods and services. This can be a bad thing for the average person’s financial well-being, especially if their pay doesn’t increase at the same rate that inflation does. There are quite a few methods for measuring the inflation rate, but the most common is via the Consumer Price Index, which tracks the prices of many average consumer goods, such as food, toiletries, and even movie tickets or coffee.
Inflation doesn’t only affect goods and services though, it also commonly affects interest rates on loans, such as credit cards, home loans, car payments, and more; as well as the interest rates on savings accounts. An increase in inflation generally means an increase in interest. But that’s a good thing, right? At least, if you have your money in savings? Well, not exactly. Interest will only maintain your purchasing power if it outpaces the interest rate, and, most of the time, the interest rates of savings accounts aren’t high enough to do that.
How Can You Ensure That Your Assets are Protected From Inflation?
Putting all your faith into the dollar is generally a bad idea if you want to be protected from inflation. Even investments can’t protect your money if they’re all running parallel to the dollar. So what can you do? You can diversify. Investing in companies which bring in offshore profits, or in industries which are relatively stable around the world, such as mining or natural resources can help you to keep your purchasing power stable, and ensure that your money retains its value. But, perhaps the best investment for holding your money’s value is physical gold. Over the long term, gold has managed to increase in value faster than the dollar, not only retaining value but gaining it.
U.S. Money Reserve
One of the largest distributors of United States government-issued coins is U.S. Money Reserve. Their reputation for excellent customer service, high-quality coins, and gold products has allowed them to remain at the top for many years. Over those years, they’ve helped countless Americans to stabilize or even increase the value of their money by giving them the information and assistance they need to decide whether or not investments in precious metals such as gold, silver, or platinum are right for them.