The economy has been a topic of debate lately, with headlines claiming that Biden’s economy is the best ever and a success story for Bidenomics. However, these headlines fail to address the crucial question of who is truly benefitting from these economic policies. It’s time to look beyond the abstract concept of “the economy” and examine the impact on individual Americans and their day-to-day lives.
While there has been a rebound from the economic damage caused by the pandemic and the government’s response, it’s important to note that certain areas may take up to five more years to fully recover. Moving on with our lives has become significantly more expensive since the end of the pandemic. Grocery prices alone increased by 5.8% in 2023, leading to 71% of Americans changing their spending habits, according to a recent CNN poll. Additionally, while the national average price of gasoline has fallen from its all-time high, Americans are still feeling the pain at the pump.
The concerns surrounding economic well-being are understandable. For 26 consecutive months, Americans experienced a decline in real wages as their salary increases were outpaced by inflation. This decline, coupled with the 5.8% increase in grocery prices, has been punishing households for the past two years. Despite headlines about inflation easing, the cumulative effects are undeniable. Over the past two and a half years, primary residence costs have gone up by 16%, rent payments by about 25%, food prices at home by 20%, electricity by 21%, and gasoline prices by a staggering 72%. These increases in the cost of necessities have led to consumer debt reaching an all-time high, with many people maxing out their credit cards just to cover their bills.
Inflation doesn’t just impact the prices we pay for everyday goods. It also affects asset prices, making it increasingly difficult for individuals to own a home. To curb the high levels of inflation, the Federal Reserve has raised interest rates, resulting in higher costs for consumer credit. The housing market has been hit particularly hard, with mortgage costs skyrocketing. Higher mortgage rates have reduced home purchasing power by a third, and median monthly mortgage payments have increased by over 85% in the past three years. Home prices themselves have surged by 30.3% since January 2021 and have tripled in the past 20 years, making it incredibly challenging for individuals to achieve homeownership.
It’s clear that budgets are shrinking while expenses continue to rise. The combination of lower budgets, higher payments, and soaring home prices makes it increasingly unlikely for those who don’t already own a home to ever own one. This begs the question: Does this indicate a strong economy? Are American families truly better off today? Unfortunately, for the majority of people, the answer is a resounding no.
Headlines claiming that inflation is easing at 4.7% are intentionally misleading. When we analyze the data, we see that everything that matters to American households is significantly more expensive than it was just three years ago, thanks to inflation. Inflation has become the silent killer of our financial future. Therefore, it’s crucial to diversify our savings with investments that are resistant to inflation. One option to consider is including physical precious metals like gold and silver in our investment portfolio. These tangible assets are highly liquid and provide a great hedge against inflation.
While “Bidenomics” may be deemed a success for the economy as a whole, it’s evident that it has not translated into a success for most American families. It is essential to educate ourselves on strategies for diversifying our savings and protecting our financial stability. By considering alternative investments like physical precious metals, we can aim to preserve our buying power and navigate these uncertain times.
Source link
