I bought a can of Campbell's Cream of Mushroom soup the other day and I was shocked. $1.99 per can. Ridiculousness.
History says inflation could persist for a decade If you are a retiree, or even near to retirement, you are probably more vulnerable to inflation than most.
Your cost of living is probably rising faster than your income. You’re lucky if any pension or annuities raise their payouts to match rising prices. Social Security does, but only a year in arrears. If you are in your senior years, the stock market turmoil caused by this year’s inflation crisis poses a significant risk. A lost few years in the markets is more dangerous to someone of 70 than someone of 30.
And then there’s the risk to bonds and bond mutual funds, a staple of the typical retirement portfolio. Bonds suffer the most from rising prices, because the future interest payments are fixed. So the higher inflation goes, the less those payments are worth in today’s money. Meanwhile, as governments fight inflation with higher interest rates, bonds sold with the old interest rate become less and less attractive. They fall in value to compensate.
All in all a dismal outlook, and even worse than that currently faced by the young and those in early middle age.
Last week’s news that October’s official inflation figure had come in below fears has sent stocks and bonds booming. And is causing some to hope that the inflation crisis may soon be over. Maybe inflation has peaked and will start heading back down. Are happy days here again?
Not so fast, warns legendary financial guru Rob Arnott, the chairman of money management firm Research Affiliates.
He’s run the numbers on all the big inflation surges in developed economies going all the way back to 1970. (There were over 50, remarkably.) His conclusion? We will be very lucky indeed if this inflation crisis ends quickly....................
https://www.marketwatch.com/story/history-says-inflation-could-persist-for-a-decade-11668642697?mod=home-page
