Since the start of the global pandemic in 2019, we have seen the rate of inflation rise steadily, significantly affecting the wealth of people who are rightly worried about it. Many factors create and affect inflation. Unfortunately, many of these are out of the average person’s control, so we need to find other ways to combat it. Below you will find more information about inflation and some of the things you can do to combat it and help to protect your wealth before you lose more of it.
How Inflation Works
Inflation can be a complicated matter. There are different forces at play in our economy that can affect inflation rates and hit us in our pockets. Economists identify two primary types of inflation that can affect our economy. Economists call these Demand-Pull Inflation and Cost-Pull Inflation.
Demand-pull inflation is where demand exceeds the supply of a product or service in the economy, which raises prices. Cost-pull inflation is where the production costs for the products or services increases, which also causes prices to rise. However, there can be other factors at work that affect inflation levels. If you want to do more research on the subject, there are various references online providing further information on the different types of inflation and the factors that affect them.
Other Factors At Play
Other factors can affect inflation levels. You can observe this in the USA at present with the stimulus cheques issued to the population. With many people having reduced incomes due to the pandemic and many others losing their jobs, the US government has released various stimulus packages to help revive their economy. In March 2021, they started paying cheques valuing $1400 to people across the country to stimulate spending, also affecting inflation. As a result, demand is increasing for products, which is also pushing up prices, also known as inflation.
The matter is further complicated, with many companies facing increased production costs due to creating a COVID-19 safe environment for their workers. With the two-pronged attack on the world economy, what can you do to combat it? One answer is to buy gold and silver bullion Brisbane is investing in and give yourself a hedge against inflation.
Investing In Gold & Other Precious Metals
Gold has long been seen as an excellent hedge against inflation if you consider it a long-term investment. Although investing in gold is unlikely to give you massive returns, it can protect you against inflation, with the value of gold exceeding inflation levels historically. You can also choose to invest in other precious metals, such as silver or platinum. In the long-term, however, gold is often the best performing metal that you can invest in for your portfolio.
If you are worried about the future and are looking for ways to protect your wealth, diversifying your investment portfolio and moving away from stocks and shares and buying up gold is an excellent way to do this. With gold prices rising steadily, you may wish to act now before you miss the boat, and your wealth takes a big hit.