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Why Inflation is Nothing to Worry About
So… inflation is on all of our minds right now. It affects ALL of us as it drives up the prices of things like gas and, in general, the cost of living. The question is: “when will it end?” While the Federal Reserve has continuously said that inflation won’t last very long, they finally opened up and said that it might be here to stay.
At least for the time being, but I’ll get back to that in a bit.
The Federal Reserve said at the beginning of 2021 that they expect the average inflation number to be around 1.8% ONLY. However, TODAY they raised this estimate from 3.4% to 4.2%. If you just got whiplash hearing this number go from 1.8% to 4.2%, don’t freak out too much. Those numbers aren’t too outside our comfort levels.
Let me explain…
We’ve been closely monitoring inflation for roughly 100 years now and what we found is that the inflation rate has always staggered around 2% to 3%. Intuit (a brand you may recognize, as their name is attached to things like TurboTax) developed an inflation calculator. One thing it lets you do is plug in a dollar amount, a starting year, and an ending year and see how much inflation has affected the value of the USD.
What was once worth a single dollar in 1913 is now $26.99. Basically, inflation affects what we buy. It’s kind of a terrible…