Lets discuss the effects of inflation and the $2 trillion dollar stimulus package that was just passed, and what this means for our money - enjoy! Add me on Instagram: GPStephan
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So what causes Inflation?
-The first is due to increased demand, and not enough production.
-The second cause is due to an increase of production cost in making an item.
-The THIRD source of inflation is known as “Built-In,” because it’s CAUSED by the prices of goods going up, to the point where people need to make more money to pay for them…which begins the cycle all over again.
Now, here’s the thing…in small doses, inflation is generally ENCOURAGES, and - when it’s under control - it can be a GOOD THING. The United States has done their best to maintain a safe, stable, and consistent amount of inflation annually, that - over the last 25 years, has generally hovered around 2-3% per year.
For some people, that’s great - it means that inflation causes certain assets, like stocks, commodities, and real estate, to rise in value with inflation…so, if inflation goes up 3% in a year, so does your investment. Other people say moderate inflation is necessary to keep our economy going, because - if we KNOW our money is going to lose a little value every year - it encourages us to either spend or invest it back into our economy, which keeps us growing.
HOWEVER…other people could see inflation as a negative, because - if they’re holding onto VAST sums of cash, their money will have less and less purchasing power every year they don’t spend it. It also means that those very same stocks, commodities, and real estate will cost MORE to buy in the future as they rise in value with inflation…and that means, you’ll need more money to buy them.
But, overall - in MODERATION, a STEADY, CONSISTENT inflation rate is generally seen as a healthy indicator of our economy, because people know what to expect, businesses can plan accordingly, and it’s slow enough that most of us won’t notice any major change day by day. That’s why the United States tries to aim for as close to 2% annual inflation as possible.
We can also look back just 11 years ago to the stimulus passed in 2009, known as the American Recovery and Re-Investment Act. This, at the time, was a nearly $800 billion dollar stimulus to help lift us through the Great Recession…and during that time, if we look back at news articles posted around 2009 to 2011…the worry was runaway INFLATION.
Except, we look back, the HIGHEST inflation we ended up seeing was during 2011, as our economy started recovering…and that, at its peak…was 3%. Then, the years after that…were under 2%.
https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093
And because there’s not too much data that I can pull from such an event like what we’re seeing today, combined with the lack of previous stimulus packages...there’s not too much we can rely on. But, expecting events of such extreme hyper-inflation are pretty much not going to happen in the United States and North America.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
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Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://bit.ly/2STxofv $100 OFF WITH CODE 100OFF
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
So what causes Inflation?
-The first is due to increased demand, and not enough production.
-The second cause is due to an increase of production cost in making an item.
-The THIRD source of inflation is known as “Built-In,” because it’s CAUSED by the prices of goods going up, to the point where people need to make more money to pay for them…which begins the cycle all over again.
Now, here’s the thing…in small doses, inflation is generally ENCOURAGES, and - when it’s under control - it can be a GOOD THING. The United States has done their best to maintain a safe, stable, and consistent amount of inflation annually, that - over the last 25 years, has generally hovered around 2-3% per year.
For some people, that’s great - it means that inflation causes certain assets, like stocks, commodities, and real estate, to rise in value with inflation…so, if inflation goes up 3% in a year, so does your investment. Other people say moderate inflation is necessary to keep our economy going, because - if we KNOW our money is going to lose a little value every year - it encourages us to either spend or invest it back into our economy, which keeps us growing.
HOWEVER…other people could see inflation as a negative, because - if they’re holding onto VAST sums of cash, their money will have less and less purchasing power every year they don’t spend it. It also means that those very same stocks, commodities, and real estate will cost MORE to buy in the future as they rise in value with inflation…and that means, you’ll need more money to buy them.
But, overall - in MODERATION, a STEADY, CONSISTENT inflation rate is generally seen as a healthy indicator of our economy, because people know what to expect, businesses can plan accordingly, and it’s slow enough that most of us won’t notice any major change day by day. That’s why the United States tries to aim for as close to 2% annual inflation as possible.
We can also look back just 11 years ago to the stimulus passed in 2009, known as the American Recovery and Re-Investment Act. This, at the time, was a nearly $800 billion dollar stimulus to help lift us through the Great Recession…and during that time, if we look back at news articles posted around 2009 to 2011…the worry was runaway INFLATION.
Except, we look back, the HIGHEST inflation we ended up seeing was during 2011, as our economy started recovering…and that, at its peak…was 3%. Then, the years after that…were under 2%.
https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093
And because there’s not too much data that I can pull from such an event like what we’re seeing today, combined with the lack of previous stimulus packages...there’s not too much we can rely on. But, expecting events of such extreme hyper-inflation are pretty much not going to happen in the United States and North America.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
I was curious to see how this prediction would play out. Not too well, but predicting the future is very difficult. Plus there was a lot more spending after this video which wasn’t knowable. Still it is an interesting video.
The best situation for business is predictability. A positive turn of events would be for much of the world to start using Bitcoin as the world reserve currency. Since the currency creation rate of Bitcoin is well known and predictable, countries that either use Bitcoin itself as currency or use bitcoin as a reserve currency should be able to foster stead economic growth since bitcoin's issuance rate is guaranteed and stead and predictable.
deflation gives the opportunity to smart middle classes to become wealth very very quick.
Inflation is seen as a positive thing said no one except people who like to pay more for the things they buy . Great if your rich but the lower class gets screwed .
How do you sort out the fact that the bank's loan value to bank's deposits….according to a google search ……is……."However, banks actually rely on a fractional reserve banking system whereby banks can lend more than the number of actual deposits on hand. This leads to a money multiplier effect. If, for example, the amount of reserves held by a bank is 10%, then loans can multiply money by up to 10x.Dec 19, 2020." Doesn't this make inflation irrelevant……considering this has been going on for years????
Stimulus will not result in inflation because the stimulus only offsets a fraction of money that was not generated due to unemployment and lockdown of businesses.
The FED will not allow us to enter a deflationary correction period.
yep
the velocity of money is a real thing at the cash register
Would love to see an update on this given the present times and now that we Know the new president's spending package
whose here after Biden announced the 1.9 tril stimulus?
PS , one element of investing that is almost bulletproof is low income housing- several reasons, you can alwasy tweak rents up a little ( no pun intended) , low income housing qualifies for Govt grant and Rent Programs, and the Govt cant make more land- it is finite, –
This just the beginning dog!
2 trillion and another 2and another 2
Its coming on strong
Relax yankees! your money is respected and accepted around the world the only people who seem nervous are the americans themselves you could buy anything in cambodia or Venezuela for a handful of greenback
In any unclear situation like this, buy a gold
Prices of things don't go up. Currency values will be dropping. Wait till a can of Coca-Cola costs $4… its still just a can
Oh yes inflation aka the stupid people can't pay attention to it tax.
Thank you. This is what I expected.
Your wrong about the coffee. The price of the coffee stays the same but the money is worth less. The coffee still holds it original value. Sorry but this is not the video to watch to understand inflation.
You need to listen to the guy that predicted the 2008 crash. Peter Schiff
Is it ok to compare ourselves to Venezuela?
hyperdeflation or hyperinflation
Literally every democracy ever that turned corrupt, no joke: Hyperinflation
Lol.. Until it's not worth anything. We have so much debt dude. Eventually that can collapse the system