Things to know in order to tend to your money
This morning The Economic Peephole took a look this morning at three economic events occurring around the world that have the potential, or that already are, affecting our financial well-being. They included the housing crisis, the debt ceiling and the debt crisis in Greece.
Unemployment, lack of jobs, inflation and the Middle East are all threats to our own personal finances!
Here are some other areas that may cause a financial headwind for the economy and then by extension for our money and our financial futures!
- US unemployment and the prospect for finding work: What is more fundamental to the financial well-being of a household than money coming in on a regular basis. It is like the old saying that goes, a recession is when your neighbor doesn’t have a job and a depression is when you don’t have a job. Jobs creation is currently not occurring at a pace that is strong enough to get the country back to full employment, and many who have been looking have given up. Getting people back to work is US Job 1!
- Consumer inflation: Inflation is always reported on the basis of core inflation and then inflation ex-food and ex-energy. Why? Because according to the powers that be these food and energy prices are volatile and as a result they skew the results. But, as we all know, the last time I checked these are really the only basic items in the index that families are most concerned with buying. If we reach the point whereinflation is high and the economy is actually flat or in decline (we may be at both places already), the country could enter into an extremely painful economic period known as stagflation. Those who are as old as I am will remember that from the 1970′s.
- Middle East turmoil: The turmoil in the Middle East, were it to expand and get worse to the point of a disruption in the flow of oil, would be a game changer.
It is extremely important that people worry not only about how specific investments are doing, but rather how they are doing in the context of a larger world picture.