Inflation the Silent Killer

Has there been any time this year or in your life when you said, “Wow the price of this has gone up so much!”. This price increase is usually caused due to inflation, but supply and demand may be a cause of rapid price increases as well. 

The price of gas has raised an average of 31 cents over the past month. Analysts are predicting that $3 gas will be the national average by the end of April. 

I believe that states opening back up and the price of crude oil increasing will cause us to see gas prices never seen before. In the peak summer months (June-August) I predict that gas may be between $4 - $6 a gallon. 

California has already seen gas prices as high as $5.29, I have been paying $4 a gallon for almost two weeks now.

This is only the beginning. I suggest that you download a gas app called “GasBuddy” to keep an eye on the cheapest gas station in your area.

The price of food (meats, fast food, and restaurants) has increased as well. If you have a deep freezer or space in your regular freezer you may want to stock up on some meat to combat rising food costs . Shopping at local farmers markets and making friends with farmers may allow you to save money on produce and meat as well.

Fed Money Machine and Supply Chain Issues

So I am sure that you are wondering what is causing the price increases. It’s a mixture of two things.

  1. Supply chain issues due to Covid
  2. The Fed printing an unlimited amount of money

The global supply chain is still in a bind due to covid. Manufacturing plants/factories are behind schedule and understaffed which is leading to underproduction of goods. 

There is also a shortage of trucks and truck drivers to transport goods which is causing a delay of the delivery of the goods once they finally make it to the states.

 A supply chain needs to flow smoothly to avoid any bottlenecks, once one part of the supply chain is off track it causes a ripple effect that takes time to return to normal. We are now one year into the pandemic and the supply chain issues are only getting worse. 

Recently a large cargo ship was stuck in the Suez Canal that caused a supply chain freeze for 6 days. Every hour that this ship was logged into the canal $400,000 was lost.

I believe that we will see more supply chain issues from this event. 

You should prepare to see increases in prices and common items out of stock within the next 6 months.

Many people do not know this but the Federal Reserve has the power to print money out of thin air. The US Dollar is not backed by anything, it used to be backed by gold, but that ended in 1933. The United States stopped converting dollars into gold in 1993. 

Which leads us to where we are now with a highly inflationary currency that is able to be printed in unlimited amounts. As the Fed prints more money the value of the dollar decreases which leads to inflation.

With the covid pandemic the Fed has printed more money in the past 12 months than they have in the past 20 years combined! 

So if dollars are worth less, the price of everything goes up to compensate for this loss in value. Even though the value of the dollar decreases $1 is still worth $1. It’s just that your $1 buys you less than what it used to. 

If you go to a corner store you will see that bags of chips have gone from 50 cents to $1. That is inflation and your buying power decreasing. If you want to play around with a calculator that shows buying power of the dollar over time here is the link.

Silent Killer

Inflation is the silent killer of your money. Year after year your dollars are worth less and have less buying power. As your buying power decreases you need to find ways to increase your income and to make your money earn you more money through investing. 

Some investment options that I recommend are stocks, real estate, and crypto currencies. If you have money sitting in the bank that has been there for years it may be time to look into investing this extra money. 

Always keep an emergency fund and never invest more than you are willing to lose. Check out my blog post on investments for more information on investing.

What this means and how you can prepare and combat inflation

  1. Stock up on meats if you have the space
  2. Download the GasBUddy app to find the cheapest gas in your area. Also getting a Sams Club, Costco’s and BJs memberships for cheaper gas is a good option as well. You can typically find deals on their memberships.
  3. Invest your money into good long term investments such as stocks, real estate, and cryptocurrency.
Ps: I may have the opportunity to allow people to invest into a hand picked portfolio that has returned over 80% in the past year. If you are interested in investing in a long term stock portfolio managed by me (SEC compliant). Fill out this survey. Thanks in advance

RESOURCES FROM BEEZ