Financial Advisor Richard Jordan Explains The Truth About Inflation
Financial Advisor Richard Jordan discusses fears of inflation and how it could affect retirement planning.
Plano, TX – March 8, 2013 – Richard Jordan, Founder of Fortress Estate Solutions, recently explained inflation, its historical effect on the economy and how it affects our retirement planning today. Mr. Jordan explains:
Inflation is a multi-dimensional thing. It is not just the general increase in prices. Most Americans would agree that each individual’s view of inflation has to do with the prices of certain items they buy often like food and gasoline, 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. The government excludes the costs for food and gas from their calculations for inflation increases in Social Security and SSI Disability checks, and it limits healthcare costs to 4% of income. Yet the average 70 year old will spend 12% of their income on health care costs, and their next two largest budget items are food and gasoline!
Price Inflation hurts retirees the most because most retirees live off a fixed income, and 40% of it is Social Security payments that are designed to NOT keep up the inflation they are each experiencing. Worse, it is especially painful today because of Ben Bernanke’s and The Federal Reserve’s “War On Cash,” which is driving the interest rates available from safe investments and bank-offered savings plans to all time lows now and for the foreseeable future. For seniors, it is a classic case of, “retirement costs are up much higher than the government’s general inflation numbers while their income is rapidly declining.” However, there is a lot more to this Inflation topic than simply today’s prices.
Monetary Inflation is a whole different type of inflation. It is a deceptive inflation that is hard for the average person to track, because it happens when the US Government is asking the Federal Reserve to print more money. They are asking to inflate the amount of money available, which always eventually DEFLATES the value of our cash in our banks and brokerage accounts. This idea is, in US historical terms, a 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, because the Government has sold us on the idea, “that more money around equals more prosperity.” However, that is only true as long as the money holds its value, and over time there is no way it can hold it’s value.
Monetary inflation likely played a key role in the decision to abandon the gold standard backing our money in the US, which happened on August 15, 1971, leading to the “Nixon Shock”. In essence, the change to a fiat currency with a floating exchange rate in the US represented a form of reset for our own currency in the United States.
What does this mean to us today? Mr. Jordan 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 and limits health care costs to an unreasonably low percentage of income, is expected to rise just 0.1%. The government will suggest it points to possible deflation and/or hardly any inflation at all. Yet this is at a time where the amount of Government debt is reaching nearly unsustainable levels and the Federal Reserve is running the printing press 24/7. How much longer can they deceive us about inflation?
The important thing to consider is the reality of inflation being much higher for you and your family than government estimates, and more specifically, what are you doing with your finances to manage that reality? 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 faster over time when the government is overprinting money like they are now, and for the foreseeable future.
For more information on how Richard Jordan can help, please visit http://FortressEstateSolutions.com/ or call (888) 682-5952.
About Richard Jordan:
Richard Jordan is the Founder of Fortress Estate Solutions, pllc and has been in the financial field for more than 20 years. Right out of college, Jordan started working with ITT’s corporate group, which included Hartford Insurance. In just five years, he rose quickly in positions within the company from district to regional management and then into a 21 State Area Director.
Three years ago, Jordan started to share his views on financial planning on the radio. He started at a local station in Dallas and after tripling the audience for the show in six months time, he started doing a show for CBS radio in Dallas for KRLD 1080 in 2012.
Fortress is one of only 4 percent in the United States that is a pure fiduciary investment advisor firm. The remaining 96% of registered investment advisors work for or are broker dealers who collect commissions on investment products they recommend, which creates a conflict of interest for their clients. Fortress is strictly a fee-based fiduciary advisor firm and it can only make higher fees when their client’s investments make more money.