Friday, October 05, 2007

Worried about Inflation

I take an active interest in my stock portfolio, and as such, I am always reading financial news articles. Repeatedly lately, the media has been reporting that the devalued dollar is a harbinger of a recession and inflation. My own observations of the costs of things tells me that inflation has come. Five years ago a 50 lb. bag of rice at Sam's Club cost $7.87. The price today is $12.44. Five years ago gasoline was at $1.11, today it's $2.61 here in Hartsville. Inflation is upon us. When I worked at McDonald's in the early to mid 1990's, a value meal cost $2.99, now it's around $4.27.

Benefits of a weak dollar and inflation:

1. International companies, like YUM! Brands have more business overseas than domestically. When they repatriate those earnings in dollars, they actually make money on the conversion.

2. Fixed interest mortgage. With inflation, the dollars you borrowed are worth less in actual payback terms, so it actually costs you less to repay it, provided your salary increases with annual COLAs (Cost Of Living Adjustments).

What sucks is that as Mickelle and I try to keep the prophets' counsel to have the mother stay home and raise the children, living off just my salary becomes hard to do. We live comfortably, but there is precious little discretionary money for vacations, Christmas, etc.

President Howard W. Hunter said:

You who hold the priesthood have the responsibility, unless disabled, to provide temporal support for your wife and children. No man can shift the burden of responsibility to another, not even to his wife. The Lord has commanded that women and children have claim on their husbands and fathers for their maintenance (see D&C 83; 1 Timothy 5:8). … We urge you to do all in your power to allow your wife to remain in the home, caring for the children while you provide for the family the best you can. (in Conference Report, Oct. 1994, 69; or Ensign, Nov. 1994, 51)

That's why we do ebay, and I scrounge for things to sell on Craigslist and half.com. Without those sources of income, we would either have to live a Spartan life or Mickelle would have to go and get a job to maintain our lifestyle. Right now, I'm wishing I made about $8k more a year than I do.

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