Can Inflation Have a Positive Impact?

by | May 21, 2023 | Invest During Inflation | 2 comments

Can Inflation Have a Positive Impact?




(10/21/22) Higher inflation is no reason to stop making contributions to your retirement savings, regardless of mode: Just alter the allocations. No Shift. What happens after the mid-terms? Inflation isn’t budging; the Fed went too far, and we’ll see more adverse effects in 2023. There’s no place to hide but in Cash. What happens if Yields continue to rise; interest rates can only go so far. When is Inflation is a Good Thing? COLA on Social Security; the IRS Standard Deduction for couples increases to $27,700; Social Security is actually longevity insurance. “Extreme Gen-Z.” The Goldman Retirement Study: How to recreate Your Paycheck; Cash flow is the lifeblood of Retirement; guaranteed income in Retirement.

3:18 – The Positive Side of Inflation
14:30 – Why Interest Rates Can Only Go so Far
30:30 – When Higher Inflation is a Good Thing
44:28 – Recreating Your Paycheck in Retirement
Hosted by RIA Advisors Director of Financial Planning, Richard Rosso, CFP, w Senior Advisor, Danny Ratliff, CFP
Produced by Brent Clanton, Executive Producer
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Inflation is a term that is often associated with negativity and economic disruption. It refers to the rate at which the general price level of goods and services rises over time. As inflation increases, money loses its purchasing power, which can make individuals and businesses worse off. However, despite its adverse effects, there are also some benefits to inflation, which can have a positive impact on the economy.

One of the positive aspects of inflation is that it can help to stimulate economic growth. When prices increase, it can encourage consumers to spend more money, which, in turn, can lead to increased economic activity. This increase in demand can help to drive up production levels, which will create more jobs and improve standards of living for everyone.

Inflation can also make exports more competitive in international markets. When a country’s inflation rate is higher than that of other countries, its currency tends to depreciate, making its exports cheaper. This can lead to an increase in demand for the country’s goods and services, boosting economic growth.

Another potential benefit of inflation is that it can help to reduce the burden of debt. When inflation rises, the money owed by individuals and businesses becomes less valuable. This means that they can pay back their debts with money that is worth less than when they originally borrowed it. This can be particularly helpful during times of economic hardship when many people are struggling to repay their debts.

Inflation can also encourage investment in the economy. When prices are rising, individuals and businesses are more likely to invest their money because they are confident that they can earn a return on their investment. This can lead to an increase in economic activity, create jobs, and stimulate more investment in the economy.

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Finally, inflation can help to reduce the real value of wages. This can be beneficial for businesses as it can lower their labor costs. This, in turn, can lead to increased profitability, which they can use to invest in their operations, create new jobs, or provide better benefits for their employees.

In conclusion, while inflation is often viewed negatively, it can also have positive effects on the economy. It can stimulate economic growth, make exports more competitive, reduce the burden of debt, encourage investment and lower wage costs. However, the benefits of inflation must be weighed against its negative impacts, such as reduced purchasing power and increased uncertainty. Thus, it is vital to maintain a balance between inflation and its associated risks to ensure a stable economy.

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2 Comments

  1. Lonnie Evans

    VA disability and military pensions are also going up. They are expected to mirror the 8.7%, but official numbers will be released December 1st.

  2. William Blackwell

    Thanks Guys!!! That music really gets you going first thing in the morning, so let's go watch a market funeral!!! Lol, might be some stocks worth buying again after this Bear leaves the woods!!!

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