According to a recent article, in November 2021, used car prices jumped up 44% compared to a year earlier. In December 2021, J.D. Power estimated that the average used car price hit $30,000 compared to about $23,000 the previous year. Amazing. The cost of new cars is also soaring, averaging $46,000.
For almost 200 years after the founding of the United States, the value of the U.S. dollar was officially backed by gold. This was called the gold standard. In 1933, in partial response to the Great Depression, Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold. In other words, a person could no longer insist on being paid in gold. For a while, at the time, it was illegal for Americans to own gold.
The gross national debt of the United States just surpassed $30 trillion. The big question is, do we need to be worried? The answer is: yes, we do. Now, let’s break down why.
We are currently experiencing considerable inflation in the US with the dollar. Some economists define inflation exclusively as the increase in the amount of currency in circulation, period. The more currency chasing the same amount of goods makes each unit of currency worth less, and therefore, the goods cost more.
U.S Treasury Bonds and high-quality corporate bonds have always been considered a conservative and safe way to invest, compared to stocks. Many investment advisors would say, “subtract your age from 100, the number you get should be the percent of your portfolio invested in stocks, the rest should be in bonds”.