Have you noticed how your dollar doesn’t seem to go as far as it used to go? This country used to have dime stores, now there are dollar stores. Inflation can gradually erode the value of your fiat currency dollar.
Wealthy people understand the basic definition of inflation. They buy precious metals to help them hedge their wealth portfolios against the devastating impact of inflation. Learn about protecting your purchasing power via US Money Reserve gold.
Fiat Currency Inflation
Have you noticed how the price of the most basic goods tends to rise gradually? Certain products, like computers have lower prices due to technological innovations. Other goods are not being dramatically improved.
Economists might call the gradual rise in prices of products without any commensurate improvement or change – “inflation.” The government closely tracks this figure because it can have a severe impact on the ability of people to thrive. If their money becomes worthless, how can society continue?
Electronics stores will want consumers to have the highest surplus wealth, so they can afford the largest-screen televisions. If their wealth is being eroded through inflation, they might not spend as much on luxury goods. They might try to save more.
Higher Grocery Bills
Those who guide the economy at the Federal Reserve seek to create acceptable levels of inflation. Individuals and businesses want to have a solid understanding of price levels. Families calculate their grocery bills every week.
If people cannot properly calculate their grocery bills each week, they might need to cut back. They might not have as high levels of nutrition. The grocery stores also might suffer.
The grocery stores will assume that certain numbers of shoppers will buy certain amounts each week. If this drops, then the store will need to toss out wasted food. The grocery store might eventually lose money.
Businesses also want to know how much of their budget will be spent on certain inputs. After a successful IPO, a company will spend the funds on various inputs. If the price of these inputs goes up dramatically, then the business might need to try to raise more money.
Gold Inflation Hedge
How do banks and wealthy people handle inflation? Couldn’t rising prices destroy their bottom line? Some financial institutions have very small profit margins.
If you are fortunate enough to visit a central bank, you are likely to find large stores of gold in their vaults. These gold bars are carefully assayed for purity levels. Some financial institutions even have their own mark imprinted on the bars.
The US Money Reserve sells gold bars and coins to its clients. This allows the clients to hedge against inflation. See, gold and silver tend to rise as inflation rises – this is why precious metals are inflation hedges.
Buying gold can help you store some of the wealth, you have worked hard for. You can’t do a whole lot about grocery prices. You can buy some gold from the US Money Reserve for wealth protection.