Inflation, at times, sneaks up like a cat.
This is Alice, one of our barn cats.
Other times inflation rushes in like a lion…such as…now.
Multi currency investing protects us from inflation.
Here is Boots our other farm cat…not dangerous like a lion or inflation…unless you are a mouse I guess.
Inflation is worse than statistics suggest. This is because of the nature of the statistics.
Most mornings, when we are at our Blue Ridge farm, we take an early hike in the woods. Our two cats, Boots and Alice, join us with our hound dog, Ma. This seems strange to me. I have never had cats who like to hike along…but these two do. Our cats and dog get along…unlike wealth and inflation which do not.
Often we stop at the pond. Boots and Alice look for mice. Ma sniffs everything. I sit and reflect on economics, reality, statistics, multi currency investing and inflation.
It is beautiful here…mists play on the meadows and the shadows are long.
The shadows remind me of distortions created by statistics. How numbers hide reality and how this fact and the change it heralds will make some multi currency investors rich.
Most investors will become poorer…because inflation and wealth do not get along. Inflation hides reality. Most investors are tricked. They do not see economic reality and they do not adapt and make multi currency investments or at least investments that really fight inflation.
According to US government inflation statistics, core prices described as “Core CPI” have risen just 2.3% in the last year.
Yeah…let the statistician that came up with this number go food shopping!
Believe it or not the Core CPI, which is so often used by statisticians to describe inflation, actually strips out food and energy, because these prices are volatile.
A better guide to real inflation is the “Core Personal Consumption Expenditure Price Index (PCE deflator)”. This index includes the average increase in prices for all domestic personal consumption. It’s indexed to a base of 100 in 1992 and derived from the largest Gross Domestic Product component, personal consumption expenditures. This includes important costs such as housing, most insurance, motor vehicles, energy, food and medical expense.
This index rose 2.1% last quarter.
2.1% per quarter inflation is a bit more serious than 2.3% a year.
Yet even this serious rise masks the reality that many of us face because even the PCE deflator includes things we do not buy often…such as computers.
The big costs…that really take a bite, especially for those planning to retire or go on a fixed income are food, energy, medical expenses and insurance.
In the last year medical care costs have jumped 4.4%. Food is up 5.1%. Energy has risen 16.1%.
Over the past nine months, global food prices have soared 40%, while food reserves are at 30-year lows. The rising cost of food is becoming a major source of global social instability and economic hardship.
Yet this is just the beginning of inflation problems as we will see in tomorrow’s message.
Until then, good global investing.
P.S. Remember. Problems create opportunity.
Big problems create big opportunity.
Bigger problems create bigger opportunity.
The biggest problems create the biggest opportunity!
This is what I love about capitalism – humanity serving one another- at work.
Take inflation’s push on energy prices, as an example. Higher fuel costs have forced some airlines to charge an extra $15 for checking a suitcase. That”s quite a problem.
One answer is that some hotels have added a suitcase buyback in their marketing.
Stay with the hotel and they’ll knock the $15 baggage cost off the room bill! Problem solved. The consumer remains even, and the hotel that adapts prospers.
Those who change, adapt and invest in solutions to problems are those who will profit.
This is why we are examining seven multi currency shares.
Learn more about multi currency investing at our multi currency portfolio course.
Learn more about fighting inflation with Ecuador real estate and Ecuador Living.
See dates for our Ecuador tours and courses below:
One really important part of fighting inflation during times of change is maintaining a positive attitude and good health. This is why we cook as much as we can with local natural foods like these blackberries that are blooming just below the house. Learn more about how to enhance health, energy and vitality at Cotacachi Food.
Learn more about how blackberries can help enhance health at Blackberry Pie.