Great Depression Online Archive Issue:

Goblins of Inflation

Inside This Issue You Will Discover…

*** Bring It On
*** Middle Class Millionaires
*** Inflation
*** And More

Bring It On

On Halloween Day 2007, Federal Reserve Chairman Ben Bernanke looked the goblins of inflation square in the eyes and cut interest rates 25 basis points…essentially saying ‘bring it on.’

Damn the dollar the banks need help, he must have thought.

Apparently it didn’t work.  For the next day we were greeted with this headline…

“Fed Pumps $41B into U.S. Financial System” 

Here AP Economics Writer Jeannine Averse wrote, “The Federal Reserve pumped $41 billion into the U.S. financial system Thursday, the largest cash infusion since September 2001, to help companies get through a credit crunch.”

Oops!

Now what?

Your guess is as good as ours.  And we guess that whatever is next will not benefit the dollar.

Middle Class Millionaires

Then we learn that a million dollars just doesn’t seem to be a million dollars these days.  We wouldn’t know from experience, but we do find it discouraging that a million dollars will only buy you a middle class lifestyle in retirement these days.

Taken from a Forbes.com story by Carrie Coghill Kuntz on October 11, 2007, “It's the plight of the "mMillionaire" -- the middle-class Millionaire.

“Mansions and yachts are out.  The mMillionaires who want to retire before age 65 or 72, find they must live in three- and four-bedroom homes and drive mid-priced four-door sedans and mini-vans.”

And here’s why…

Inflation

As reported by USA Today on October 29, 2007, the percentage price increase since January 1981:

Harvard University Tuition – 424%
Amusement Park Admission – 292%
Existing Home (median price) – 228%
Average Hourly Wage – 144%
Oil – 141%
Overall Inflation – 139%
Bread – 128%
Gasoline (U.S. average per gallon) – 121%
Iceberg Lettuce – 111%
Eggs – 95%
Bananas – 50%
Coffee – 26%

We think this speaks for itself; no comment from us is needed.

Sincerely,

M.N. Gordon
Great Depression Online

P.S.  If you’re nearing retirement and could use some additional income you should take a look at the work of our friends over at High-Yield Income.  They’ve uncovered some great opportunities for high yields and enormous capital gains: http://www.streetauthority.com/hy-sample.asp?aid=168896.

 

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