Financial Advisor Michael Canet, JD LLM Explains The Truth About Inflation
Michael Canet, JD LLM, retirement planning expert, discusses fears of inflation and how it could affect retirement planning.
Glen Burnie, MD – January 24, 2013 – Michael Canet, JD LLM, Founder of Prostatis Financial Advisors Group LLC, recently explained inflation, its historical effect on the economy and how it affects our retirement planning today. Mr. Canet explains:
Inflation is a multi-dimensional thing. It is not just the increase in prices. Most Americans would agree that their view of inflation has to do with the prices of certain items and if the prices of those items they buy most frequently are up from the prior year – then they are dealing with the effects of inflation.
Price Inflation hurts retirement because most retirees live off a fixed income, so it is especially painful if the interest rates available from safe investments and bank-offered savings plans are low. It is a classic case of, “costs are up and revenue is flat.” However, there is a lot more to it.
Monetary Inflation is a whole different type of inflation. It is a simple inflation to track because it simply means the Government is asking the Federal Reserve to print more money. They are asking to inflate the amount of money available. This idea is, in historical terms, relatively new monetary inflation started during the Kennedy Administration and has been a steady policy in Washington since it started, regardless of political party. Democrats have inflated money supply just as the Republicans have inflated the money supply. And you know what? We, as Americans, like it. More money around equals more prosperity … As long as the money holds its value.
Monetary inflation likely played a key role in the decision to abandon the gold standard in the US, on August 15, 1971, leading to the “Nixon Shock”. In essence, the change to a floating exchange rate in the US represented a form of reset for our own currency right here in the United States.
What does this mean to us today? Mr. Canet continued:
The debate will continue to rage on because although history says one thing you cannot ignore the following and very recent financial report:
10:12AM EST December 13, 2012
The CPI (Consumer Price Index), out Friday, sizes up prices paid by consumers. It’s expected to fall 0.2% for November.
Even the so-called “core” CPI, which omits prices for food and fuel, is expected to rise just 0.1%. This suggests possible deflation and not inflation at all even at a time where the amount of Government debt is reaching nearly unbelievable levels and the Federal Reserve is running the printing press 24/7.
The important thing to consider is the possibility of inflation and, more specifically, what are you doing with your finances to manage that possibility? If you don’t have a plan of action, you may consider some amount of your retirement money positioned to grow with inflation. For long term planning, it is likely a good idea since prices tend to go up over time.
To learn more about Michael Canet, JD LLM and Prostatis Financial Advisors Group LLC, visit http://www.prostatisadvisors.com or call 410-863-1040.
About Michael Canet:
Michael Canet is the author of Amazon #1 best-seller, Surviving the Perfect Storm: How to Create a Financial Plan That Will Withstand Any Crisis and can be heard every Thursday night from 6-7 pm as host of the Savvy Investor Radio on AM680 WCBM. His television show, The Savvy Investor, airs weekly on ABC, NBC, and The Live Well Network. He can be heard every Saturday at 9am on AM 730 in the DC area as the financial expert on Financial Safari Radio. He has been published in The Baltimore Sun and Fox News and appears locally on NBC and ABC affiliates. Everybody deserves a sound retirement and there are no shortages of good opinions, see the professionals at Prostatis Financial Advisors Group for your personal retirement plan.
Michael and his team at Prostatis Financial Advisors Group LLC have been providing comprehensive financial planning to their clients for more than 20 years. They do this by taking a holistic approach to the estate, tax, and financial planning process. It is not how much risk you can tolerate, rather, it is how much risk must you take to accomplish your goals. After all, it isn’t how much you make; it is how much you keep. With a legal background in estate planning, a Master’s Degree in taxation, and being a financial planner – Michael has the necessary skills to guide his clients into and through retirement.
With four offices, Michael Canet and his team serve clients in Maryland, DC, and Northern Virginia as well as retirees across the country.