Sunday, June 01, 2008

Many consumers spend early rebates on soaring cost of living

This is the headline of a story in Weekend USA TODAY. This "news", if you want to call it that will certainly put a little damper on the folks in Washington who expected everyone to go out and buy a new flat screen TV or a new I-pod. The cost of living is rising and rising fast. Food, gasoline, clothing are all on upward spirals. Looking at the monthly inflation numbers put out by the government you would never know this was occurring, but as everyday consumers, going to the mall, supermarket, and gas station you know the direct effect. This is the single most crippling item on the economy. When I read articles like this it really gets me concerned. What happens to people on fixed income? Let's say you just turned 65, retired and are looking to live out your years quietly. Now lets say this happened back in 1998. 10 years later you are 75, and your disposable income has greatly decreased. you still might have another 10-15 years ahead of you and the amount of money to live off of is worth alot less. This should be a real concern for the government and society in general. Inflation is a huge problem which should be dealt with strongly. I think the Fed knows this and is one of the reasons I think we will see substantially higher rates going forward. Not only here but globally. This is a drum I have been beating for a while and one I continue to beat.

Good Luck and Good Currency Trading.



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