A simple excursion to the grocery store provides a basic lesson on inflation to the average American consumer, “What happened to the price of orange juice?” While weather fluctuations and agricultural conditions affect the price, the cost of that half gallon represents a small variable in the larger equation that measures inflation. The terminology can be daunting: target inflation rate, core rate, federal funds rate, personal consumption expenditure.
Notwithstanding, there is an inflation measure, publicized on the evening news, the Consumer Price Index (CPI) which, when rising, indicates increases in the cost of everyday goods and services. With the current inflation rate in the U.S. at 2.1%, there is a degree of nervousness among market analysts about future upsurges.
With most incomes fixed until the annual pay review, monthly price rises are worrisome. Consequently, outlay increases for the same purchase, or purchases are postponed, in effect lowering the standard of living. The most dramatic examples are big-ticket items, evidenced by the cost of a new car, or building a house. Nonetheless, for the retired or those planning for retirement, the effects are acute. Inflation has the result of a pay cut, eroding the value of a retirement plan, directly impacting the retiree’s standard of living.
Closely following higher inflation are higher interest rates for mortgages, credit cards, and auto loans, nevertheless, savings account rates and money market rates lag, leading consumers to explore other options for protecting their funds. Accordingly, individuals might invest in artwork, commodities, or other tangible assets that increase in value with inflation. Ordinarily, a portfolio that includes gold is not subject to the vagaries of commodity bubbles. U.S. Money Reserve, founded in 2002, encourages consumers to include gold in their portfolio to both preserve capital and enhance capital growth. Philip N. Diehl, current president of U.S. Money Reserve, and a former director of the U.S. Mint noted, “Gold often rises when other assets are crashing.” Gold values consistently rise faster than inflation, accelerating whenever inflation exceeds 3%.
An established company with a customer focus, U.S. Money Reserve offers consumer education and information on precious metals from gold and silver bullion and bars to certified gold and silver coins authenticated by PCGS, the Professional Coin Grading Service. Staffed with a team of numismatic and precious metal experts, U.S. Money Reserve customers receive superior service, “… with the goal of establishing a long-term relationship.”