Why Your Dollar Is Quickly Losing Its Buying Power

April really was a cruel month as far as your cost of living goes. The government numbers, the rising Consumer Price Indes and the Producer Price Index in April, are an early look at what is to come.

What if you took the rate of increase in both the CPI and the PPI and annualized them, assuming that those rates would persist for 12 months?  

The CPI rose by 0.64 percent in the month of April.  Annualized?  That’s 8 percent inflation,  

The PPI exploded by 1.4 percent in April.  That is three times higher than the consensus forecast.  Annualized?  That produces an 18 percent rate of wholesale price inflation.

That is banana republic inflation!

With the onset of the Iran War all eyes have been on the price of oil and gasoline.  But as we have warned, it is rising oil first and then food.  

Now through Apil, after only two months of the war, consumer prices have begun rising at these new and even faster rates.  And while the war’s biggest impact on food prices is yet to come, those will be built on food prices have been screaming higher and higher for years.

We are publishing the following charts from WolfStreet.com without comment because they are the most dramatic and self-explanatory illustrations of the food price calamity and include the most recent CPI numbers, those through April. 

Now look below at the increase in the U.S. money supply over the last decade (the blue line) versus the purchasing power of the dollar as measured by the CPI (the red line.)

Even before the oil shock and the food shock that is about to get even worse, Washington has been printing money.

The value of your money – its purchasing power – is going down.  That is the long and short of it.  

Finally here is a ten-year gold price chart showing gold’s appreciation during the devaluation of the dollar.

To learn more about protecting your purchasing power and profiting with gold and silver see us at Republic Monetary Exchange