1 Senior Watching Out 4 Other Seniors
Should you be worried about inflation?
The basic idea of this section is to help seniors understand some of the risks, both current and future, that they are facing. This is not intended to be a comment about either major political party. The goal is to provide unbiased information so that each senior can make up their own mind about major life altering issues. We will generally refer to the average senior as having a modicum of retirement/savings; however, we are well aware that there are many seniors who survive from one day to the next only because they receive Social Security payments and help from Medicare.
Is inflation coming soon and why should you care?
The LA Times recently ran a column entitled “How inflation can alter the equation.” It could have been called- will inflation destroy your life? For many, many years inflation has been low in America. People forget the days when it was 13%. That happened back in the days of Jimmy Carter. It took Paul Volcker at the Federal Reserve to drive a spike through the heart of the factors which were causing inflation back then.
The exact definition of inflation is complicated. Over the years, it is easy to think of it as of your money just does not go as far when we have inflation. If last year you paid $1.00 for an item and this year it is $1.10 then you have inflation.
The government measures inflation using the CPI (Consumer Price Index). However, they don’t count everything because they use what they call “core inflation” which leaves out energy and food costs. Obviously, those can be big items for most of us.
There is a website called http://www.shadowstats.com and it can be very interesting to read. They try to show the real inflation. It is worth a few minutes to review that website.
Here are a few examples of what might cause prices to go up:
1. The oil embargo by OPEC in 1973 and then the Iranian revolution in 1979 . That last one tripled the cost of oil. Prices have gone up and down over the years. This is inflation caused by a supply issue. Sometimes it is temporary and will correct over time.
2. When there is a big demand for an item (think the original Apple iphone) but the manufacturer has limited capacity this can drive up the price. This is a demand side increase and again it should balance out over time as more items are produced .
3. When the value of the currency itself is attacked then it generally takes more of the currency to buy the same thing. For example, in Germany they had hyperinflation because the government kept issuing more and more money. When that happens, farmers demand higher and higher prices for their food products. Then retailers charge higher and higher prices. This inflation is caused by emotion and fear that the currency will lose more value going forward causes the inflation to get worse and worse. It feeds upon itself and gets to the point where the entire system is likely to collapse. Think Venezuela!!!
America has officially over $20,000,000,000,000 in national debts. Unofficially, there are many who think the number is closer to $120,000,000,000,000. That is just UNSUSTAINABLE!!!! It is important to remember that there is no gold or silver or any other assets that we can convert our Dollars into when the disaster that is coming hits us.
By the way, the inflation rate last year in Venezuela was 563%. The government there has plenty of oil reserves but can’t even supply the people with things like toilet paper at reasonable prices. Food is scarce and the prices keep going up. Socialism never works and it will never work. It just brings misery to the people. The elites do fine and so do their friends.
Why should you care? Obviously, we are not living in Venezuela. However, our wonderful country is up to its ears in debt. Seniors are the most likely to be hurt by inflation because most of us are on fixed incomes. Many of us survive only because we have our monthly Social Security checks and access to Medicare.
Imagine for a minute that you are faced with choosing between going to the movies and buying a drug that helps you stay alive. What are our options when inflation reaches 5% or higher. That means our money is worth less and the cost of things is going up. Now imagine 10%. Pretty scary.
Seniors need to find ways to get involved in protecting our futures. Most politicians tell us lies until they get elected and then they do whatever they want. They are beholding to those who gave them money in order to run for public office. We need to make them understand that the Federal government needs to start working towards balancing our annual budgets and also work on lowering the National debt over the next 10 years or so. Otherwise, we could end up like the poor citizens of Cuba.
Get involved today. Find a local group that is fighting to lower the costs of government at every level. Instead of finding ways to give more “free” stuff to illegals we need to be looking out for our futures. Seniors are important, but sadly we are dying off and the politicians seem to care about us less and less. Please, get involved to protect your own future and mine.
Listed below are a few websites that might be of interest to seniors: