2007-06-29 23:35:12 · 5 answers · asked by Anonymous in Social Science ➔ Economics
Prices are supposed to be governed by supply and demand, in the free market system......But governments want to cheat, they inject more money into a country so economic expansion can take place and make everybody happy for a while.
However through out history what it has caused is boom bust cycles. It's my opinion the U.S. may be entering the bust side of the cycle because too much money was injected too fast.
I would suggest to fixed income earners, if possible, after bills are paid to buy Gold.
Gold has appreciated in dollars at a faster pace than inflation has deflated the purchasing power of dollars, over the last 6 years.
If you're a S. S. retiree, you're stuck .
2007-06-30 05:35:03 · answer #1 · answered by beesting 6 · 0⤊ 0⤋
inflation is your own little peice of the devaluation of the currency of your country. You buy stuff from china (or your country does) and you get to experience some of the unpaid debt to china via your less worthwhile dollar. that is inflation.
People all get prosperous at once! they all want to by the same fabulous stuff... they compete to buy it and drive up prices. that is inflation.
Inflation makes each dollar worth less. A person on a fixed income therefore loses standard of living as inflation occurs.
Inflation has been severe enough that even wage earners are experiencing a decline of real buying power over the long term.
People on a fixed income need to keep their debt burden at nothing, and their essential costs very low, so that as the buying power of their dollar declines, they can still live indoors.
2007-06-29 23:54:37 · answer #2 · answered by Gina C 6 · 1⤊ 0⤋
If your income is from interest on savings you should realize that the average real (inflation adjusted) interest rate is 3% and plan accordingly. If you have stocks you can add 2% to your average return, but you must be able to stand some risk. A mixture of stocks and bonds usually work best.
Owning your home protects you from inflation in the housing market which account for about 30% of your budget.
2007-06-30 02:03:35 · answer #3 · answered by meg 7 · 0⤊ 0⤋
We are all too stupid and greedy to step back and truly appreciate what we have, we fail to see the value in the experiences around us and we let others tell us that there is more value in other things and that the value of the things we already have is reduced - we believe them which is one of the proofs that we are stupid. - Advice to fixed income earners - make freinds with people who make you happy and make sure you have enough to survive - love life, live long and prosper.
2007-06-29 23:45:41 · answer #4 · answered by pimple 2 · 0⤊ 1⤋
Suze Orman from MSNBC on Sat. nights says "It's not what you make, IT'S WHAT YOU SAVE". Very true! God Bless!
2007-06-29 23:37:37 · answer #5 · answered by j b 5 · 0⤊ 1⤋