All the quantitative easing the government has done during the pandemic has unleashed the inflation genie. Inflation is on the rise in Canada. Ways to protect yourself are steps you should start learning today. Money supply has been introduced by close to 20% to fight the pandemic. So it is no surprise that real estate across the country has jumped around the same. A lot of this can easily be blamed on the massive printing by the governments around the globe.
As we move forward out of the pandemic in Canada expect rising prices in most consumer products across the country. Businesses that are re-opening are already talking price rises. Up to 30 % and maybe even more of all business could raise prices. Trudeau and the boys are already hinting of easing the money printing and raising interest rates Canadians who bought houses during the last 6 months will testify of the crazy bidding wars going on in Real Estate. Not all but a large part of this is the money printing that has flooded the country with cheap cash. With rising prices coming down the pike for just about everything it could mean these over leveraged new home buyers could be in trouble. Let’s face it if interest just rise a little there wallets will be a hurting. Add this onto the fact everything else will be rising in price trouble could be heading our way in Canada.
How do you protect yourself during inflation.
There are many ways to prepare and protect yourself in times of rising prices. One way is to tighten your belt. Take out that pen and paper and start redoing the finance budget of your house hold. What things are necessary and what are not. Maybe it’s time to sell one of the cars with rising gas prices ahead. Another way to go would be to trade that big gas guzzler in for a smaller more fuel efficient machine. Zoomers living off their OAS pensions should be especially concerned. Food is on the rise as will be medical expenses. Housing is also becoming a huge concern for the elderly. No one knows how a senior on a fixed income will be able to cope with soaring cost’s. Well off seniors will be fine as they see the real estate and stock hitting new highs. But what about the average Joe or Low income person. How do you protect yourself. Already housing is out of reach for most people if you don’t already own a home. So where are the poor going to live? Good question.
Don’t expect the government to come along and help you out. You might be waiting a long time. I was talking the other day about how the world is today with a close relative. Her millennial daughter and new husband went out hunting for a home. In her own daughter’s words she stated that we were so lucky to get this old town house and we only paid 85,000 over asking price. After thinking about this for awhile one can realize their is something seriously broken. As with all things broken if they don’t get fixed they stop working all together. One might assume the housing market is broken and if they don’t fix it soon the entire machine will soon stop working. Protecting one’s self against paying thousands of dollars over market value is expecting inflation to rise even more. Housing prices will have to soar even higher to keep these thousands of new home buyers above water in their equity.
Assets such as high paying dividend stocks and Silver are a good insurance policy during inflation. Silver might be better that gold right now because it is so undervalued and it’s cheap compared to gold. Gold will surely rise with inflation even if interest rates do rise. One problem with buying gold is the price. I mean how many poorer Canadian Seniors have thousands of dollars laying around to buy gold. Not many, which is why silver is a safer and more affordable way to prepare your self. All one has to do is drive by a gas pump or go down to your local grocery store in Canada right now. Yes, prices are starting to rise. Leaders are saying this is just a temporary spike in the inflation genie and she will be put back in the bottle. God let’s all pray this will happen. If not the country is going to be in for a lot of pain when the bubbles start to pop.
It seems what we might expect is high unemployment combined with inflation. Unemployment in the States last month is the highest it has been in awhile. Even with help wanted posters everywhere. What this is telling us is the wages aren’t high enough to attract workers. First signs of rising inflation is business raising wages to attract workers. Who want’s to work if the wages they are making don’t even pay their bills. Especially when the government is printing trillions and passing out checks. Now if businesses are not producing to their full capacity this means less stuff to buy. Less stuff to buy with trillions of dollars being printed in Canada and US means only one thing. INFLATION!
Let’s look at the last big inflation binge. The early 1980s recession was a severe economic recession that affected much of the world. Between approximately the start of 1980 and early 1983 the World went into recession. It is widely considered to have been the most severe recession going back to WW11. One of the key reasons for this recession was the massive spike in oil prices that occurred in the late 1970’s. With War breaking out in the middle east between Israel and Palestine an oil schock could be on the horizon. With hackers shutting down the oil pipe flow in the states and with the States shutting down Key Stone an oil shock could be near. This is one thing to keep an eye on.
Any massive price move higher in oil just as the economies of the world come out of lock down could be a double whammy for oil prices. Air lines all over the world are talking of re-opening as early as September. If an oil shock occurs because of the Middle East conflict and hacking of the oil lines trouble could be near. It just might prove a perfect storm for sky rocketing oil prices. These factors all rolled into one could spike the economy into hyper inflation. Trillions of printed money, soaring real estate, soaring oil, soaring food costs. There is one last piece in this inflation nightmare puzzle and that is WAR.
One must protect yourself against the coming inflation surge. Get yourself some real estate if you can. Don’t over expend yourself. The flood gates of printing money have been released so don’t expect a massive move in interest rates to stem the inflation tide. Governments will let inflation run hot simply because they have no choice. Watch for the oil price spike! No one can foretell the future but one thing for sure the cards are starting to stack up for an oil crunch. Take action and protect your hard earned money with some silver.
Edited by Brent Arnold Walker