What does the US 9.1% inflation rate do to your money?
The inflation rate is the percentage by which the general level of prices for goods and services is rising. The inflation rate in the US has been around 2% for a few years, but recently it has increased to 9.1%.
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Inflation rates are calculated by comparing the cost of goods and services from one year to the next. Inflation rates are usually expressed as a percentage, meaning that if an item costs $1 in 2015, but then costs $1.10 in 2020, then inflation for that item would be 10%.
What does the US 9.1% inflation rate do to your money?
The US 9.1% inflation rate means that prices of goods and services will be rising by 9.1% each year which will make it more difficult for you to purchase items with your money. This means that $100 will now only be able to buy $90 worth of goods and services.
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Inflation has many different effects on people and their money. One of these effects is that inflation decreases your future spending power by eroding your purchasing power. Over time, you will only be able to buy less with your money because prices are increasing faster than wages are, which leads to higher rates of inflation.
Does being a non-American Protect you from inflation?
Inflation is one of those terms that people often misunderstand because they don’t know what it means or how it affects their money.
You know yesterday I saw someone write that the staggering inflation figure that the dollar is generating is not bad to him because he's not an American.
His points were valid in the sense that he is earning in dollars, and the conversion is cool when we change it to his country's currency. I did agree with him at some point until I read other posts today.
What he failed to realize and I didn't see too when I read through was the tight position the increase in inflation around the dollar puts those who have to depend on trading, buying, selling, importations, etc., in his country. So these will be deeply affected.
And these countries will need to print more money to balance this equation just as every article had stated today.
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This means, regardless of how he puts it, dollar rates affect everyone whether they are Americans or not. The fact that one isn't affected now doesn't mean one won't be affected in the future.
He may not have a reason to import any goods or services and pay in the dollar equivalent of his country's currency now, but he never knows where his position might be tomorrow.
So everyone should also be looking at the two sides of the coin. Instead of focusing on what they can see and leaving the other one, they should see both sides.
Currently, our country is experiencing a high cost in everything. The cost of food has grown, gas is expensive, businesses are laying people off, and everyone is being forced to live with as much frugality as possible.
Damn, I have no idea where this guy was going with his thoughts. Maybe, he doesn't buy stuff, he probably eats and drinks air, while his converted dollar sits on his wallet and shines... Lol. Or maybe, he is just happy he can afford all of these things regardless of the price
Higher Rates of Inflation are Severely Damaging to Your Future Spending Power
It doesn't matter if you are an American or not, inflation which causes prices to rise will affect you too. This means that you need more money to buy things than before.
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This can be a huge problem if you're living paycheck-to-paycheck and don't have much savings because it means you might not be able to afford things like food, clothing, or housing.
How to Plan your finances when Inflation Rate is on the Rise
The inflation rate may be increasing, but that doesn't mean you should panic. Inflation can be good for your money in some cases. It can be good for you If you have a lot of assets then inflation will make your assets worth more. This means to beat inflation, you should make sure your money is invested in portfolios that will make them worth more in the future than they were before.
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For example, if you invest your money in stocks, bonds, and stablecoins, and earn interest on them, then you will likely get more money as the value of your investments increases with inflation.
Any more good thoughts?
Right now, the best way to protect yourself from inflation is to get involved in cryptocurrency. This system of money isn't dependent on any ruling party nor is it controlled by a certain body. It's a decentralized system that protects your funds from inflation.
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We are currently experiencing the bear season which is a good time for you to fill the bag. Do you know what the bear season does? It weeds out those Ponzi Schemes that show up in the form of crypto projects. Now that such projects have been swept under the rug because they had no capacity or value-added advantages, you can see with clear eyes where to put your money.
Therefore, take advantage of the season, and protect your hard-earned money from inflation, and your future self will thank you for this.
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A portion of the higher prices is due to food and energy costs going through the roof. That is not exclusive to the US or Americas. And those markets are global in nature.
Plus when countries and companies have so much USD denominated debt, it affects everything.
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I completely agree. Over here, the part of our expenses that keeps increasing is food and Gas like you mentioned. So this is definitely a global thing.
This is worthy of note. Thanks for the points.
I could agree more on this being involved in crypto ( the legit ones and not the ponzi schemes that are rampant nowadays is one way to make it to this bear market it is a good equalizer for some as we can increase our values from time to time while we add more monies on the side.
Our country's also experiencing a high inflation rate right now and our spending power isn't that high compared to the years that we have thought we are getting high earnings still it is not equal proportion to what we can use nowadays.
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I am glad you agree. The ponzi schemes are often gotten rid off during bear seasons like this. Because they have nothing substantial to stand upon.
Thanks for visiting and for contributing. I appreciate.
Sure thing Iska - it was a nice and informative post!
There are a lot of data points that go into it, but the short of it is that we live in a global economy, and when one of the major, global, portions of the economy experiences distress, it's bound - better or worse - to reverberate throughout the rest of the globe.
I agree. There really are lots of data on this one. And I agree with the fact that once a portion of the economy is stressed, it affects the rest of the globe. Thanks for contributing sir. I appreciate.
Nice said boss since I started investing in crypto, it has always been a good one for me and I can easily say I do crypto but now getting enough money to buy in this period is just the best so when market gets stabled you can earn double
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I know that feeling. But don't worry, this too shall pass. There will come a time in your life when you will be able to afford it. Then, you will fill as much bags as possible during the bear season and earn that double you so desire during the bull season. I believe in you. You'll get there if you don't give up.
Sure thanks for believing in me tho. It is jus a matter of time
You deserve this. Yep, time makes everything better.
Yeah Yeah
On your description of inflation it's not that it will rise is that it has risen, CPI is a lagging indicator not a forward indicator.
PPI is a forward indicator
CPI is already priced in, the market has adjusted, and yes you have less purchasing power on your savings, and your income you take a pay cut, but your exposure to inflation may be different to mine since we buy different things.
It could be higher or lower, in addition the 9.1% print is based on hedonic adjustments as it needs to keep pace with liabilities such as government salaries and obligations like pensions, so it is not the true rate of inflation but one that is the most politically palatable and economically viable to service obligations
On your solution, I would also disagree, cryptocurrency is not sound money, they are private centralised money on distributed ledger where some have preferential access, you're horse shoeing in bitcoins attributes to cryptocurrency and that is complete misdirection.
Cryptocurrencies are simply tech companies who did not want to go the private equity to spac, direct listing or acquisition route, they are risk on assets with half baked products and look how they deflating.
In fact, the 9.1% you lost YOY in holding cash is nothing compared to the 60 - 90% lost holding a cryptocurrency.
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Now, this was insightful. Thanks for the new lessons.
I have learned from you that Inflation has already risen and that the 9.1% inflation rate we are given isn't the true rate but our Government are hiding their heinous financial activities behind it.
I have also learned where cryptocurrency comes into play. And I appreciate you reminding me that it's possible to lose more holding crypto if care isn't taken.
Thank you so much for the insightful comment. I learned a lot.
Pretty much every currency is collapsing into the dollar, which is also falling (inflation effect), meaning it affects pretty much everyone... they just haven't realized it.
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