Tuesday, December 11, 2012

Inflation. It Is Coming.

What is Inflation? According to Investopedia http://www.investopedia.com/terms/i/inflation it is "The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum." 

Inflation in my economic opinion is coming.  Inflation in my economic opinion is here already.  The massive fluctuations in energy prices, food prices, greater and higher taxes along with massive increases in health care costs are already contributing to inflation.  Our government dislikes inflation since it increases its borrowing costs to finance its massive National Debt.  If you are a saver right now you are not getting any interest on your savings.  You as a saver are subsidizing our governments excessive spending and National Debt.  The Federal Reserve's constant free money policy will ultimately lead to a valueless dollar along with inflation.

Thus as higher taxes are being desired by Democrats in Washington, higher inflation will be a direct result.  And we will not see any meaningful cuts in spending or entitlements for the future.  The National Debt will keep increasing.   The fiscal cliff will be achieved along with inflation.  Good luck with dealing with this new economic debacle on the near horizon.

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