Is Inflation Coming?

#inflation #risingprices #Isinflationcoming

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***Video Links***

Boom vs Bubble: The Truth About The Housing Market - https://youtu.be/bF-D9biX5mw

Inflation Explained - https://youtu.be/CD9kldM8iig
Welcome to Florida Boy Finance where it doesn’t matter when you start on your financial journey as long as you are on the journey to financial freedom. It seems that the everyone is worried about inflation. Is it coming? If so, what does it mean for the economy?

Quick review, inflation is where prices on goods and services across a sector or industry goes up and the value of a dollar goes down. Its basic premise is that stuff gets more expensive as the value of a dollar goes down.

There are 4 main causes of inflation: Market Power, Demand Pull, Asset Market Boom, and Supply Shock.

Market Power is the ability of a business to avoid competition. So they can, in essence, charge whatever they deem a fair price with no other competition, consumers are forced to pay what they deem as far.

Demand Pull is where there is an increase in the demand for a product with no increase or a decrease in the supply of that same product.

Asset Market Boom is where the price goes up as a result of the asset market. The price of the cost to produce that asset is increased so therefore the cost of the final product is more expensive.

Supply shock is where the supply of that product is suddenly or drastically reduced leading to a shortage which leads to an increase in price.

The market is booming right now for many reasons: the COVID 19 vaccine, the stimulus and the restrictions on business operations being lifted. The economy is rebounding better than expected.

Inflation is happening and already here in some sectors. The housing market and certain commodities are seeing real inflation currently. Prices for lumber, copper, steel and cotton are through the roof.

It can have an adverse affect on the market. Federal reserve chairman, Jerome Powell, is expecting only a temporary rise in inflation but the Wall Street Journal says that is wrong.

WSJ calls transitory inflation a myth. It’s major premise is that once business raise prices to accommodate the increase in prices on their end, once that prices go back down, the businesses will not decrease their prices. They will only increase their bottom line.

Warren Buffett seems to agree that inflation is coming and prices will not go down. Both the Wall Street Journal and Warren Buffett disagree with the Federal Reserve on this view.

To hedge yourself against inflation be sure to buy things like real estate, gold, U.S. Treasure Inflation Protected Securities (TIPS), growth style stocks like technology stocks, and commodities are great protection against inflation.

Thanks for watching! Don’t forget to like the video and subscribe to the channel. New videos are posting every Tuesday. Always remember to live below your means, save outrageously and give generously.
***Video Clips Used Courtesy of…

CNBC - Fed Chair Jerome Powell says he expects temporary rise in inflation this year - https://youtu.be/PL23HchElhc

Forbes - Stock Market Bubble Will Burst & Imnflation Is Coming - https://youtu.be/5iesAAcrdUg

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Alvin Risk - Aces Funk

Видео Is Inflation Coming? канала Florida Boy Finance