The true cost of inflation is huge, but few care…
Pension video
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LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
The True Cost Of INFLATION is HUUUGEE….
Inflation, the rising cost of goods and services over time, is a term that many of us have heard before. However, few truly understand the immense impact it can have on our daily lives, especially our finances. The true cost of inflation is significant and should not be underestimated.
To comprehend the magnitude of inflation’s consequences, let’s start by examining how it affects our purchasing power. When prices rise, your hard-earned money can buy you less. For instance, think about buying groceries. If the price of milk, eggs, and bread increases, the purchasing power of your salary diminishes, as you need to allocate more money to cover the same basic necessities. As a result, you might need to cut back on other expenses or sacrifice the quality of goods you purchase.
Furthermore, inflation can corrode the value of money over time. Let’s say you have $10,000 saved in a bank account. If the annual inflation rate is 2%, you would need $10,200 at the end of the year just to maintain the same purchasing power as you had initially. If your money earns less interest than the inflation rate, it is essentially losing value. Consequently, your savings might not be enough to support you in the future, especially during retirement when you should be able to enjoy the fruits of your labor.
Moreover, inflation can negatively impact investments. When the general price level increases, the value of stocks, bonds, and other investments might decrease in real terms. For example, if you hold a fixed-rate bond, and the inflation rate surpasses the bond’s interest rate, your investment’s real return will be negative. This means you might be losing money rather than gaining as anticipated. It is paramount to consider inflation when making investment decisions to ensure that your money is protected and can grow over time.
Inflation also has broader societal implications. It can exacerbate income inequality, as lower or fixed-income individuals struggle to keep up with rising costs. The cost of housing, healthcare, transportation, and education are all significantly impacted by inflation. This can make it increasingly challenging for people to meet these basic needs, placing significant strain on individuals and families.
Furthermore, inflation can lead to economic instability. Rapidly rising prices can erode confidence in the economy and result in reduced consumer spending. Businesses may also face increased costs of production, leading to unemployment or downsizing. Inflation can create a vicious cycle, hampering economic growth, and causing wider implications that affect society as a whole.
To mitigate the negative consequences of inflation, governments and central banks strive to maintain stable price levels through monetary policies. However, it is crucial for individuals to take proactive measures to minimize the impact on their personal finances. Diversifying investments, considering inflation when budgeting and saving, and monitoring market trends are all strategies that can help individuals navigate the true cost of inflation.
In conclusion, the true cost of inflation is enormous, as its effects trickle down into various aspects of our lives. From purchasing power decline to the erosion of value in savings and investments, inflation poses real challenges for individuals and the wider economy. By understanding its magnitude and taking steps to mitigate its effects, we can better protect our financial well-being in the face of a seemingly unstoppable force.
I was thinking about the unemployment numbers..would they take account to the amount of retirements that started these years? alot of boomers are going to retire this decade..
Collectivism, "democracy" (populism), interventionism, statism and just social democracy or even worse communsm/socialism just don't work, never did, never will, especially long term. And we'll all realize it at last either if we want it or not. We must stop spending so much and start letting people save and invest. If not we'll never be prosper. Thanks.
Gold $40 an ounce in 1971, $2,000 in 2023, up 50x. Need I say more?
Gold, real estate, stocks, up 100x in Fed debt notes. Gold, real estate, stocks up ZERO in honest US Treasury gold ounces. Just debasement. Holy Roman Empire Batman. We are just debasing the currency to create empire. Russians and Chinese want OUT. How to BEAT inflation debasement, gold? Land? collectibles?
Same problem since the Revolutionary War in 1780's. US debt $35,000 in 1835, now $32 Trillion. Dollar lost 98% of buying power since 1971, driving up prices from currency debasement. What to do? Own inflation hedges. Stocks only break even. Invade, kill, steal, lie for loot, debase. Nothing has changed in 4,000 years.
actually the ability to pay down debt through implementing advanced ai and reducing payroll will be enormous
I would love to know how your advise would differ for a 53 YO widow?
Thanks for sharing this important reminder of what is going on .
Financial Repression 101
1. Sustain inflation averaging around 6-7% with pretense that the target is 2%
2. Maintain a negative real interest rate
3. Declare a crisis from time to time – c19, declare war or create one, semi-conductors, China, climate change – lots of choices there. Loop back to Step 1
Thanks Sven!
None of this matter, its just retaill talk, misleading people, only thing matters is Supply and Demand and ability to identify them on chart.
Hi Sven. So definitely, printing money to cause inflation as a government strategy to "liquefy" debt, is not working? Because public debt is increasing even with this inflation.
Can we have a new video for JD please?
Yea 18% sounds about right at least for food notwithstanding what the official numbers are.
About 2021 – wasn't it the wrong time to buy stocks? Everything was overinflated and was falling red for most of 2022. So at the time of inflation (purchasing power loss) we also had massive investment assets value loss. I just don't get how exactly investing was the solution in 2022. Please make (or point me to) a video with an explanation (and maybe an example) of what and how should be done in 2022 to overcome at least current inflation.
If we, let's say, take one or more (value?) companies from the list on your platform and look at whether and in what proportion investing in those companies could make us 20% income after taxes
– will there be only companies like MSFT and NVDA or maybe any classical inflation hedges like utilities, consumer staples, etc?
20 % after taxation… 28-29 % before…
I always bring this back to Triffin's Dilemma. I think it was Volcker who worked out that the US trade deficit could be maintained (to keep the reserve currency status) by borrowing the money from other countries. This 'debt crisis' dates back to the end of Bretton Woods (and was probably guaranteed by the start of Bretton Woods).
The theatre around the debt ceiling is asinine.
Sven you used to make more of these kind of videos. I love them really. These are eye opening content. It's been a while that you don't talk about buying property anymore. I'm wondering if property can be considered a value investment under the current conditions. Of course finding the intrensic value of a property is not easy. Any thoughts?
Again, some audio disruptions
Great video to share with friends whom I'm trying to warn about their pensions, thanks.
Waiting on a useful video sir
Good point, but there is no real defence against inflation. Any business pays higher tax for a smaller real earnigs. Gold and inflation proctection bods will keep you at zero. You have to find amazyng business, and it will be to expensive with small yields. Do I get this right?
11:40 or buy now NVIDIA or anything related to AI….the next tech bubble.
9:00 and in war times…who is going to pay to keep the guns shooting? well, the drones flying?
waiting for an useful video, Sven.
8:00 South Park – "And it's gone" https://www.youtube.com/watch?v=-DT7bX-B1Mg
5:50 so we are getting closer and closer to be a Japanese economy with 250% of debt and 0% growth.
In norway, the goverment increse the pensjon to be in line with inflation each year. They just reported an uptik of 8,54% for 2023 on all pension saving. So, I guess we are covered but I agree, not many countries does this.
Sorry, this is in norwegian, please google translate
«Så mye øker pensjonene i 2023
Uførepensjon og alderspensjon som du tjener opp reguleres med grunnbeløpet, mens alderspensjon som blir utbetalt reguleres med gjennomsnittet av lønns- og prisveksten. Det gir følgende økning fra 1. mai:
Alderspensjon, AFP og særalderspensjon øker med 8,54 prosent. Det samme gjelder etterlattepensjon for deg som er fylt 67 år.»
I guess we are lucky as we have only 520 billion in dept, and we have a national fund of 15000 billion, that is about 2,4 million per citizen ( we are small country), so we really have + in the book, I guess we have no worries 🙂 yea
there is a chance we go into deflation soon ? but yes longterm you are right
Governments will try to solve all future problems printing money. Either you have large assets in productive capital or you'll get squeezed like retirees