Understanding Inflation And How To Protect Yourself From Its Effects

Understanding inflation and its effects on our household and investment portfolio are crucial.

We almost always have some inflation, meaning wages and prices increase which helps job creation and economic growth.

The absence of inflation is deflation,  which means declining prices and could cause or worsen a recession as  businesses lay off workers.

– The Fed intends to remain accommodative for a while, with lower rates and liquidity. – Fiscal support helped businesses and households.

Understanding Inflation

The definition of inflation is a steady rise in the general level of prices of goods and services.

What Is Inflation And How Does It Affect Your Buying Power?

The CPI is the best measurement of the prices of all goods and services purchased for consumption in urban households.

Calculating Inflation

Demand-pull inflation occurs when total demand for goods and services in an economy outpaces supply.

Higher Demand

Higher production costs can come through  increased wages, raw materials, depletion of natural resources,  droughts, or higher taxes.

Increase In Production Costs

Prices can rise when shortages in goods  and services are associated with natural disasters such as severe  weather conditions, droughts, floods, fires, or avian flu.

Natural Disaster Shortages

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