Financial Advisor Robert Russell Explains The Truth About Inflation
Financial Advisor Robert Russell discusses fears of inflation and how it could affect retirement planning.
Dayton, OH – January 25, 2013 – Robert Russell, President of Russell & Company, recently explained inflation, its historical effect on the economy and how it affects our retirement planning today. Mr. Russell 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. Russell 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.
For more information on this topic, or to learn how Robert Russell can help, please visit www.theirapros.com.
About Robert Russell:
In only nine short years, Robert Russell has amassed an impressive list of clients and credentials. He often contributes to CNBC, Fox Business, The Wall Street Journal, US News and World Report, and he also co-hosts “Retirement Rescue Radio” on 1290 AM and 95.7 FM WHIO.
Russell is an Investment Advisor Representative (IAR), 2nd generation wealth advisor and member of the Ed Slott Master Elite IRA Advisor Group. He was acknowledged as one of the top “40 Professionals under 40” by the Dayton Business Journal and was honored as a Five Star Wealth Manager – Best in Client Satisfaction by Cincinnati magazine.
Russell is the author of best selling, “Retirement Held Hostage,” in which he outlines several of the strategies that have brought him to the top of his field.
Securities offered through Kalos Capital, Inc., Member FINRA, SIPC. Investment Advisory Services offered through Kalos Management, Inc., 3780 Mansell Rd. Suite 150, Alpharetta, GA 30022, (678) 356-1100. Russell & Company is not an affiliate or subsidiary of Kalos Capital, Inc. or Kalos Management, Inc.
Neither Kalos Capital, Inc. nor Kalos Management, Inc make any endorsements or opinions about the coursework required to become a member of Ed Slott’s Master Elite IRA Advisor Group and as such cannot guarantee the accuracy or completeness within.
A policy change may incur fees and costs, and may also require a medical examination.
This scenario is for illustrative purposes only and does not represent and actual client. Results may vary.