The Stealth Bomber

By Mark Bertrang, The Creator of the Financialoscopy® on Thursday, April 14th 2022

I lived through the last time our nation survived the "stealth bomber" of inflation.  It began in the early 1970’s.  The president at that time – Richard Nixon - thought he could stop it by simply declaring a “price-freeze” on goods and services.  I was only 12-years old then and even I knew that was foolishness.  It didn’t work.

The next president, Gerald Ford declared his administration would “Whip Inflation Now” by donning a button that simply said “Win” on his lapel. The phrase was cute, but it didn’t save the day.

President Carter tried and failed to combat the bombs of the stealth bomber of inflation.  He survived one term.

President Reagan’s first term also suffered the bombing of inflation.  Luckily for him, inflation finally emptied its payload.

So, here we are again.  Why do I refer to inflation as the stealth bomber, because it’s usually under everyone’s radar until it begins dropping its payload. 

Here are the bombs it carries:  

  • First of all – Paychecks feel smaller.  High prices means that your dollars buy less.
  • Number Two – You might like the fact that your home has increased in value over the past couple of year; but that also means that your property values have increased and that increases your property taxes.
  • Number Three – Your house now costs more to insure, because its replacement value has increased.  Hello, did you hear what that means - higher insurance rates.
  • Grocery and restaurant bills are now higher and with that there are now higher state and local sales taxes on those items.
  • Have you noticed that your ‘savings’ rates on certificates of deposit, savings accounts and money market accounts haven’t increased?  So, if inflation is up 7% over the past year, your dollars on deposit are now worth 7% less.  Here’s the math, what was $100 now feels like $94.  Inflation causes you to lose the value of your money, as I like to say - as safely as possible.  It’s like a negative rate of return.
  • The same goes if you have a pension without a cost-of-living adjustment.  Your dollars feel like less, because they buy less.
  • Which reminds me about cost of livings adjustments for Social Security. These payments never go up while inflation goes up, but only after inflation goes up and only after a year has passed.  You will always be playing ‘catch-up’ and feeling behind.

It’s been a long time since we’ve experienced the stealth bomber of inflation.  You can’t hear it.  You can’t see it, but it’s overhead dropping financial neutron bombs.


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