Let Them Eat Kix
According to one financial advisor quoted in Forbes, there are a few driving factors behind our current spike in prices – high demand and low supply.
COVID-19 lockdowns caused Americans to sit on their money for months but lately they’ve been injecting those dollars back into the economy with abandon.
The nearly zero-percent mortgage interest rates we’ve been enjoying since March 2020 are driving up the demand for houses – and therefore their sales prices.
And global supply chains for many products are all goofed up because of the pandemic’s disruptions.
For instance, due to a shortage of vehicles for sale — new vehicles are being held back by car makers because of a shortage of computer chips — new and used car prices are ridiculously high.
I bought a new Toyota Tacoma Off Road truck in December of 2019 and it’s done something no other vehicle I’ve bought has ever done in my life: gone up in value.
Kelly Blue Book tells me that my truck with 11,100 miles on it is worth $3,000 more than I paid for it brand new.
That is one of the few upsides to inflation. Owning property is another. If you have a fixed-rate mortgage, but the dollar “value” of your home keeps rising, you at least keep pace with inflation.
But if you are retired, as my parents are, and living on a fixed income, inflation is an invisible tax that nibbles at the buying power of your money.
Your limited dollars buy fewer groceries and other increasingly expensive basic items you need to sustain yourself.