by Daniel R. Amerman
GoldSeek
Supply chain disruptions have created a scarcity of goods in some categories. At the same time, the U.S. government continues to flood the economy with dollars, trying to keep spending up and the economy out of recession. This combination of too many dollars chasing too few goods is a classic formula for inflation, and on a rolling average basis we have indeed experienced the highest rates of inflation this past spring and summer that we have seen in the last forty years.
However, inflation is only half of the equation when it comes to maintaining the value of savings. The other half is interest rates, which can offset or even more than offset the rate of inflation, leaving savers with the purchasing power of their savings intact.