The Consumer Price Index rose 4.1% in 2007, which was the biggest increase since a 6.1% jump in prices in 1990.<\/p>\n
Average weekly earnings, after adjusting for inflation, dropped by 0.9% in 2007, the biggest setback since a 1.5% fall in 2005.<\/p>\n
Let’s face it, Economics are boring.\u00a0 They are boring to me.\u00a0 They are boring to you.\u00a0 In fact, the only people they aren’t boring to are Economists.\u00a0 I don’t know any Economists personally, but I would suspect that they are very boring people.\u00a0 My Economics Professor took a stab at some jokes in class, but he wasn’t headed for Comedy Central.<\/p>\n
If you ever go to a party and start a conversation about the Economy, you will be sitting\u00a0by yourself\u00a0within about 10 minutes.\u00a0 So, I understand\u00a0if you don’t enjoy these posts\u00a0and I promise to move on to a more exciting subject.<\/p>\n
Unfortunately, the Economy is your future.\u00a0 Not just the recessions and the interest rates, but more importantly, the inflation rate and the currency devaluation.\u00a0If you plan to retire with a million dollars and are saving toward that goal, then you should be fully aware that a million dollars will\u00a0only be worth around a couple hundred thousand in 20-30 years.\u00a0 So, you really need to save around four million in order to retire a millionaire, in today’s dollars.<\/p>\n
If you are older and closer to retirement, then you may not be so concerned.\u00a0 But, you still have to consider that your retirement may last 20-30 years.\u00a0 So, inflation is still a huge factor in your future.\u00a0 Do you suppose rent and medical costs will only go up 2.5% per year ?<\/p>\n
I like to use 5% as a realistic annual inflation rate in my financial planning.<\/p>\n
The Consumer Price Index, the Core Rate of Inflation and other Government indicators are not useful in measuring inflation.\u00a0 These numbers are, in my personal opinion, being purposely understated because our Government can’t afford to pay higher interest rate on the Treasury Bond debt.\u00a0 Nor, could they afford to pay the automatic cost-of-living (COLA) increases for welfare, Social Security and other social programs.\u00a0 So, retirees get squeezed, because their cost-of-living is going up much faster than their Social Security benefits.<\/p>\n
Even scarier than the real rate of inflation is the rapid slide of the Dollar.\u00a0 Government economists like to tell us that the weak Dollar is good for the economy, because it increases exports.\u00a0 But, in my opinion, this is a scam.\u00a0 The weak Dollar is purely a symptom of our Government printing ever increasing amounts of money to cover their deficits.\u00a0 This is simply a convenient way for our Government to steal from everyone who owns a Dollar.<\/p>\n
Foreign investors have caught on and are now starting dump our Dollar.\u00a0 That’s definitely not good for America because everyone’s savings are quietly being swindled by the devaluation.<\/p>\n
American’s are getting squeezed.\u00a0 High inflation, lower Dollar and lower wages.\u00a0 With a recession likely ahead, our free-spending politicians have left hard-working American’s in a real bind.\u00a0 No politician is going to mention this in the debates, because they have real no solution.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Big Squeeze The Consumer Price Index rose 4.1% in 2007, which was the biggest increase since a 6.1% jump in prices in 1990. Average weekly earnings, after adjusting for inflation, dropped by 0.9% in 2007, the biggest setback since a 1.5% fall in 2005. Economics are Boring Let’s face it, Economics are boring.\u00a0 They … <\/p>\n