With inflation at the highest levels we’ve seen in 40 years, American consumers are dealing with issues they haven’t seen on a large scale in decades. Among those is shrinkflation.
Shrinkflation occurs over time as inflation causes prices to rise. Companies that produce consumer goods are often hesitant to raise prices, so they choose to decrease the sizes of goods slowly.
Over the past several years, this shrinkflation has occurred regularly, but for most goods, only every few years. However, now that inflation has skyrocketed and remains elevated, it seems to be happening to more and more products.
The Scourge of Shrinkflation
You may have noticed that the half-gallon of orange juice you used to buy went from 64 ounces to 59 ounces a while ago. But now, many of those 59-ounce bottles have been shrunk to 52 ounces.
These changes used to happen slowly, over many years. So naturally, consumers weren’t happy when it happened, but they learned to adjust.
However, now that inflation is high, consumers are slowly becoming more price-conscious. They look at prices week to week, and they notice when prices increase. And they’re not happy about what’s happening with shrinkflation, which they see occurring more and more regularly.
Shrinkflation is also a reminder that inflation is something over which the average consumer has no control. We’re powerless to combat inflation or shrinkflation, and we’re told we can either take it or leave it.
Many Americans have done just that, adjusting their consumption patterns due to shrinkflation. For example, they’ll buy off-brands rather than name brands, bulk rather than smaller retail packages, or even stop buying things they used to. But at some point, no matter how many tactics you adopt to adjust to shrinkflation, you will have to face the reality that you’re paying more money to get less and less.
The Destruction of Inflation
That’s the problem with inflation. It erodes your standard of living by requiring you to pay more money for the same goods and services you used to enjoy. And suppose your income isn’t rising to match those increased payments. In that case, you may eventually have to lower your standard of living to survive.
Inflation is pernicious and destructive, so many people hate it. It punishes hard workers, savers, and investors by devaluing the money they work so hard to acquire.
Interestingly, the most damning condemnation of inflation comes from John Maynard Keynes, the economist. He has most influenced the Fed’s conduct of monetary policy over the past several decades. As Keynes observed in 1919:
“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By continuing inflation, Governments can confiscate, secretly and unobserved, an essential part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; while the process impoverishes many, it enriches some.
…
“Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of Society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction. It does it so that no man in a million can diagnose.”
Just think of all the excuses we’ve heard for why inflation is so high. It’s greedy companies, Vladimir Putin, or tight supply chains. And the ordinary citizen who does not know economics will nod his head and agree with it because he doesn’t know any better.
But all this time, the Federal Reserve’s loose monetary policy has been responsible for inflation. But, of course, no one wants to talk about how the trillions of dollars the Fed pumped into the economy in 2020 were bound to create inflation.
No one wants to talk about how the Fed tried to deny that inflation was happening, then claimed it was merely transitory, and now imagines that it can combat inflation. And because Washington doesn’t want to admit how this inflation started in the first place, you have to doubt that the solutions to inflation will be effective.
Gold and Silver as a Best Defense
Unlike most consumer goods, gold and silver aren’t subject to shrinkflation. Yes, the prices of coins will increase as the gold and silver price increase, but that’s the natural result of rising prices. You still get an ounce of gold when you buy a one-ounce coin, even when inflation increases.
And it’s even better to be an owner of gold or silver already when inflation rises and the values of gold and silver rise, too. A rising gold or silver price means that your ounces of gold and silver are increasing in value and gaining in purchasing power, unlike the dollars in your wallet that lose purchasing power as inflation increases.
Gold and silver have been trusted for centuries as inflation hedges and safe havens during economic turmoil. When paper currencies lose their value, companies go bankrupt, and financial crises envelop a nation, gold and silver remain tangible physical stores of weight that can help ensure financial stability.
Many Americans seek to protect their savings, finding out about a gold IRA or silver IRA. These precious metals IRAs are like any other IRA account except for holding physical gold and silver coins or bars. You can even fund your precious metals IRA with a tax-free rollover or transfer from an existing 401(k), 403(b), TSP, IRA, or similar retirement account.
With inflation at levels we haven’t seen in 40 years, can you afford to let the value and purchasing power of your savings and investments shrink if inflation becomes entrenched? Or would you take steps to protect the value of the wealth you’ve worked so hard to accumulate? Contact us here at ProsperityGold.com or call us at 855-325-5235 to speak with a specialist to help you make the right decisions for your future!
