Inflation is likely to continue after the election – what YOU can do about it

We’re in the final stretch of a hugely stressful election season. It feels like the results will be existentially important; like everything could change in one night. Some say there will be violent riots no matter what the result – or nonresult! Some say WWIII could start. Many are convinced the other half of the country is evil and hateful because of who they are voting for. It is truly sad to see the country so divided and we certainly pray for a peaceful outcome. 

One thing we think will not change, in spite of best intentions and best possible management, is inflation. There are many reasons to think that inflation will only increase in the coming years.

Here are our top 5 – 

 1. Supply Chain Disruptions:

The COVID-19 pandemic exposed vulnerabilities in global supply chains, leading to delays and shortages. These disruptions can persist due to factors like ongoing labor shortages, transportation bottlenecks, and increased regulation in key industries. If manufacturers and suppliers continue to struggle to meet demand in face of lagging supply, prices for essential goods and services may rise as competition for limited resources intensifies. 

2. Increased Demand:
As economies continue to bounce back from lockdowns, consumers have been eager to spend, leading to a surge in demand for goods and services. This increased consumption can outstrip supply, particularly if production capacity has not fully recovered. Industries like travel, hospitality, and entertainment may see sharp increases in demand, driving prices higher as businesses attempt to capitalize on the renewed interest. 

3. Rising Energy Prices: 

Energy costs are a critical component of overall inflation, influencing everything from transportation to manufacturing. Geopolitical tensions (e.g., conflicts involving major oil-producing countries) can lead to spikes in oil and gas prices. Additionally, efforts to transition to renewable energy can lead to short-term volatility in fossil fuel prices, which can further affect inflation if available alternatives aren’t as efficient or functional yet.

4. Wage Growth: 

As labor markets tighten, companies may be compelled to raise wages to attract and retain employees. While higher wages can improve living standards, they can also lead to increased costs for businesses. To maintain profit margins, companies may pass these costs onto consumers through higher prices, contributing to inflation. Additionally, if inflation expectations become ingrained in wage negotiations, it can create a vicious cycle of anticipated inflation and higher wage demands to keep up. 

5. Monetary Policy: 

Central banks, like the Federal Reserve, may adopt accommodative monetary policies to stimulate growth, especially during downturns. The Fed is in the process of cutting rates again. Prolonged low-interest rates and measures like quantitative easing increase the money supply, which can lead to inflation if it outpaces economic growth. If central banks are slow to react to rising inflation or feel pressured to maintain supportive policies, it could exacerbate inflationary pressures over time. 

These factors combined could create a complex economic environment where inflation persists or accelerates in the coming years, challenging policymakers and consumers alike. 

How will your retirement savings hold up in the face of rising inflation? Are you in greater danger of outliving your money if prices continue to skyrocket? 

We have good news! Owning physical gold can help preserve your purchasing power in several ways: 

1. Inflation Hedge: Gold is often viewed as a hedge against inflation. As the cost of living rises and currency values decline due to inflation, gold typically retains its value. Historically, gold prices tend to increase during inflationary periods, helping investors maintain their purchasing power.

2. Intrinsic Value: Unlike fiat currencies, which can be printed in unlimited quantities, gold has a finite supply. This intrinsic value can make it a more stable store of wealth over time. When economic uncertainty arises, people often turn to gold as a safe haven, driving its value up.

3. Diversification: Including physical gold in an investment portfolio can provide diversification. Gold often has a low correlation with other assets like stocks and bonds, meaning that when these markets are volatile, gold may hold or increase its value, thereby helping to stabilize overall portfolio performance.|

4. Crisis Resilience: In times of economic or geopolitical instability, gold is considered a reliable asset. During financial crises or when trust in currency systems wanes, gold can serve as a refuge for preserving wealth, as people turn to tangible assets.

5. Global Acceptance: Gold is recognized and valued worldwide, making it a liquid asset that can be easily bought, sold, or traded. This universal acceptance enhances its potential as a means to preserve purchasing power, as it can be converted into currency in various markets, regardless of local economic conditions. 
   
   
   

By providing a safeguard against inflation, economic instability, and currency fluctuations, physical gold can be an effective tool for preserving purchasing power over time. Don’t wait! Add gold to your portfolio and protect your purchasing power against the ravages of inflation today!  Call us!