6 THINGS YOU SHOULD
KNOW ABOUT INFLATION
1. What is Inflation:
Inflation is a general increase in prices and fall in the purchasing value of money. When inflation rises, the value of a dollar falls. As inflation drops, the value of a dollar goes up.
2. Inflation is inevitable:
Even when it is just slight, inflation is always happening. When you take prices from the 1900's and compare them to the 21st century, you will see that the price of the majority of products and services have gone up.
3. The Bureau of Labor Statistics measures inflation using CPI:
CPI stands for Consumer Price Index. CPI takes certain items and sees how their prices change over time. With this information, they are able to see how inflation is going up and down.
4. American Inflation Rate:
The Inflation Rate in America is predicted to have a continuous slight rise over the next 5 years. The rate will not rise steep but it will rise.
5. The Federal Reserve's goal is to control inflation:
The job of the Federal Reserve, also known as the Fed, is to control inflation. This means, they try to prevent inflation from becoming too high or from dropping too low. Inflation rates can get out of hand and result in economically terrible times. The Great Depression is an example of a time when inflation made a turn for the worse.
6. Inflation Hedge's:
Inflation Hedge's are items that stay around the same price no matter how inflation is changing. They are considered "safe" investments because you typically will not lose too much money on them. Some examples of Inflation Hedge's are: oil, gas, gold, farmland, and some commercial real estate.