Heat Index, Wind Chill, & Inflation

By Mark Bertrang, The Creator of the Financialoscopy® on Thursday, September 23rd 2021

 

The heat index is a measurement of the level of discomfort the average person is thought to experience as a result of the combined effects of the temperature and humidity of the air. It can cause heat rash, heat cramps, heat exhaustion, heat stroke and even death.

The wind chill is a measurement of the level of discomfort the average person is thought to experience as a result of the cooling effect of wind blowing on your exposed skin. It can cause frostbite, hypothermia, and ultimately even death.

Inflation can cause the negative increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future.

What does that really mean in simple words.  Over time, your money may not become worthless, but it most like will become worth less.

A favorite website of mine is usinflationcalculator.com. This tool calculates how the purchasing power of the dollar has changed from 1913 through present day.  It’s based upon the latest United States government CPI or Consumer Price Index.  It’s kind of cool.  Here’s how it works, if we base our calculations on the past thirty years.  Let’s say that I had $1,000 back in 1990 and I wanted to know how much money I would need to equal that value in 2020, I would simply input the dollars and dates and the calculator tells me that I would now need $1,980.19 to have a ‘real feel’ of my original thousand – meaning I would need almost twice as much money today to have the same buying power as I had thirty years early; or if I simply think backwards,  my original thousand dollars now feels like five hundred bucks. Oh crap!

So, inflation’s ‘real feel’ isn’t a good-feel, at all. It can cause the loss of purchasing power, frustration and, ultimately, a slow painful slide from what once felt like abundance.


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