It’s increasingly impossible to deny that both in the US and globally, prices are on the rise. Here's what we just learned—and why it matters.
Source: We Just Got Proof Global Inflation is Surging - Foundation for Economic Education
Predicting inflation can be a tricky thing, at least when using the most common definition...a rise in prices. While not exactly hyperinflation, there is no doubt that we have seen a significant level of inflation in those terms over the past year.
A better way to describe inflation is "an increase in the money supply". While this doesn't directly increase prices, it does put an upward pressure on prices. More money typically means more spending which equate to more demand for various products and services. Unless supply can effortlessly keep up with this increase in demand, then prices will rise. How much? It is difficult to say. It depends on where this newly created money goes and whether or not it gets spent or held on to.
However, when the government prints billions or trillions to hand out to people, you can probably bet that a large portion of that money will be spent. And why not? Every day that you hold on to it leaves you with less spending power. At the end of the day, inflation amounts to a tax on savings. The inflation rate for the past year was 3.3%. Your savings account is probably earning in the neighborhood of 0.1%...if you are lucky. That means any money you have sitting in a savings account lost 3.2% of its value last year. Inflation rates seem unlikely to lower significantly over the coming years so perhaps traditional hedges against inflation like gold, silver and other commodities are the way to got. Or, with crypto markets down right now, it seems like a great time to go all in.
Though it may sound like it, this is not investment advice.