Welcome to The Speed of Money. This is your host Jason Hartman. The Federal Reserve left rates unchanged at yesterday’s meeting. The Fed said three very interesting things in their statement. Inflation has been high. Gee, really? Elevated energy prices are likely to weigh on economic growth. And although downside risk to growth remain, the upside risks to inflation are also of significant concern.
During times of economic slowdown, the Fed usually cuts interest rates to encourage borrowing and spending. During times of inflation, the Fed usually raises interest rates to make it more expensive to borrow, causing the economy to cool.
Then there are times like nowadays, when it appears that the economy is in a recession, while inflation is still a problem. This is not good news. Forget the mortgage meltdown. Inflation will be the largest story of the decade. What can we do and what does it really mean when there are big bank failures and many, many more to come?
The average American hasn’t had a real wage increase in 40 years. The Federal Reserve is becoming more and more powerless to impact the global economy. There is a major consolidation of wealth among the rich and powerful, while the middle class is struggling with this transfer of wealth in our winner-take-all society. Inflation will decrease the purchasing power of tens of millions of people and we’re in for a decade of significant inflation. In fact, it is the story of our time.
It is time to take a holistic look at our investments and our spending habits. How do you protect yourself and your family in these turbulent financial times? Well, I have good news. In the coming weeks, we’ll explore how inflation and other financial issues impact our lives and our investments. Next week, we’ll discuss the ultimate inflation shield. Visit www.jasonhartman.com and join me next week, right here, on KABC 790 on The Speed of Money.
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Duration: 2 minutes