Inflation is Now at 7.4%; So how can I Hedge My Savings Against it?
U.S. inflation reached a new four-decade high of 7.9% in February, the Labor Department said Thursday, as Russia’s invasion of Ukraine pushed energy and commodity prices significantly higher. As the prices of Gold and Silver soar, the demand is beginning to make most of us worried as the supply becomes harder to accumulate.
Before the Ukraine crisis, economists and policymakers had been hoping for a peak in year-over-year inflation this spring as supply chains heal from pandemic-related disruptions and the Federal Reserve begins an expected series of interest rate increases next week. Nevertheless, the outbreak of war has supercharged prices for oil, wheat, and precious metals, threatening higher inflation for longer.
It seems they thought that inflation would come down with the untangling of the global supply chain, but we know they are not so sure if what is happening in Ukraine will re-tangle that
Prior to the war in Ukraine, Elevated inflation was primarily driven by vigorous demand for goods, shipping bottlenecks, and shortages of supplies such as semiconductors. Fed officials were braced for a run of higher inflation to start the year, but recent trends have been higher than expected. Housing and food costs have risen sharply, and further disruptions in new automotive manufacturing have overshadowed hints at moderating prices in the used-car market.
Economic disruptions from Russia’s invasion of Ukraine and the global response could further stoke inflation, in part because Russia is a top global supplier of oil, natural gas, wheat, and the third-largest exporter of commodities. One thing that the Fed has doubled down on, which Fed Chairman Jerome Powell referenced last week, holds that a $10-per-barrel increase in oil prices boosts overall U.S. Oil prices in the U.S. has increased by around $40 a barrel since the start of the year. Russia is also a significant player in global markets for metals used in the production of cars and airplanes and for components in fertilizer, which is a considerable expense in food production.
Because of Russia’s role in global energy and other commodity markets, “we are going to see upward pressure on inflation at least for a while,” Mr. Powell told the Senate Banking Committee last week.
Mr. Powell has said he expects the central bank to raise rates by a quarter percentage point at its March 15-16 meeting, with additional increases to follow later in the year. The plan was formulated ahead of the Ukraine invasion.
“I do think it is going to be appropriate for us to proceed along the lines we had in mind before the Ukraine invasion happened,” Mr. Powell said. “In this susceptible time at the moment, it is important for us to be careful in the way we conduct policy simply because things are so uncertain, and we do not want to add to that uncertainty.”
On Sunday, the nation’s average gasoline price surpassed $4 a gallon for the first time since 2008, when President Biden was then Vice President Biden. By Wednesday, prices had hit their highest level ever, and that is not even adjusted to consider inflation.
The surge in energy and commodity prices is the latest challenge for businesses that test whether their customers are willing to pay higher prices for products and services.
To hedge against future price increases, We have seen an increase of new customers, primarily ones who had never purchased metals prior to now. We are giving them the best price we can and trying to keep our inventory as stocked as possible, which is becoming increasingly more problematic as the European conflict and Covid outbreak continue to blaze on.
Some economists believe that inflation is still likely to peak soon, perhaps as early as the end of this month. However, the war in Ukraine increases the chance that the peak will be much higher, as the longer it drags on, the more likely we are to be pulled into the middle of what looks like what could turn out to be WW3.
The war in Ukraine has heavily disrupted momentum on the supply-chain front, and people are turning to precious metals at a record pace.
A primary worry for policymakers going forward is that higher wages will keep pressure on inflation by causing companies to raise prices to account for labor costs. Still, private-sector minimum wages rose to an adjusted 5.1% in February from the previous year, much lower than the inflation rate. We all need to start considering things we can do for ourselves; instead, it is protecting ourselves from the dollar’s collapse, putting more savings in precious metals, cutting down on eating out, or even deciding to walk more instead of driving. It is not an intelligent practice to spend more when we do not know what the future holds as we are in unchartered waters and have an administration that undermines American principles and values at every turn. One thing is for sure; If you do not have a considerable amount of your portfolio in precious metals, we highly recommend you do so while you are still able. If you have questions, we would love to help answer them, as well as get precious metals to you in your procession so that no matter what the future holds, you will not take a loss on what you have put aside and saved while trusting our politicians would do what is best to help protect our financial future, but seem to have turned their backs on everything other than pushing their agenda for their gain. Purchase Precious Metals now with GoldPro at Https://GoldPro.com or call and speak with one of our account representatives at 855-426-4653.