A Look at the Causes of Why Inflation is So High

It is no secret that inflation rates are on the rise in the U.S these days. We are currently experiencing the steepest rise in inflation rates in the last 30 years! This could be caused by many triggers such as a surge in product demand, production cost increases, supply chain breakdowns, or even changes in the housing market. Inflation can be stressful, but this isn’t the first time we’ve seen this sharp of a jump, in fact this isn’t even the biggest jump the country has experienced. 

In 1778 America experienced the highest inflation rate of all time. After the Revolutionary War America was in debt and inflation increased nearly 30%! In 1965 The Great Stagflation occurred and lasted all the way until 1982. During this time inflation rose more than 14% and saw a huge increase in unemployment rates. Typically unemployment rates and inflation rates are inversely correlated, but during this time unemployment went up right along with inflation. Many people remember the 2008 Great Recession which was caused by policies attempting to reduce inflation–they were clearly unsuccessful. 

These times of economic stress were devastating for families and led to many other consequences, but the country prevailed each time. If the country was able to come back from 15-30% increases in inflation, we can bounce back from the 7% increase we are experiencing today. To do that it is important to understand how to protect your individual finances. Investing money in things like real estate and stocks are a quick way to ensure that your money will provide a solid ROI. Preparing for retirement at an early age is also a way to ensure that your finances will be in order when it comes time to stop working. Learn more about inflation and how to protect your finances in the infographic below:

Source: Expensivity