Unexpected inflation hurts lenders since the money they are paid back has less purchasing power than the money they lent out. Unexpected inflation benefits borrowers since the money they repay is worth less than the money they borrowed. Who is harmed by unexpected inflation? Savers and creditors suffer from unanticipated inflation since the money they […]
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Inflation occurs when the value of a currency, such as the dollar or the Euro, depreciates over time, causing the cost of commodities to rise. Bitcoin (and a few other cryptocurrencies) are built to have predictable and low inflation rates. What exactly is crypto inflation? Many cryptocurrency supporters consider it to be a digital equivalent
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Bond funds are popular among risk-averse investors for a variety of reasons. U.S. Treasury bond funds are at the top of the list because they are considered to be one of the safest investments. Investors are not exposed to credit risk since the government’s capacity to tax and print money reduces the risk of default
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In theory, oil futures contracts are straightforward. They keep the time-honored practice of certain market participants selling risk to others who willingly buy it in the expectation of profiting. To put it another way, buyers and sellers agree on a price for oil (or soybeans, or gold) that will be traded at some point in
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During inflationary periods, stocks are often a safe refuge. This is because stocks have typically produced total returns that have outperformed inflation. And certain stocks outperform others when it comes to combating inflation. Many recommended lists for 2022 include small-cap, dividend growth, consumer products, financial, energy, and emerging markets stocks. Industries that are recovering from
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With the enactment of the New Deal’s National Industrial Recovery Act in 1933, the first federal minimum wage was established. The ultra-right Supreme Court of the time quickly declared it unconstitutional. In 1936, President Franklin D. Roosevelt ran for reelection on the promise of continuing to fight for a federal minimum wage. In contrast, the
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Trading futures contracts on one of the recognized commodities exchanges is the most direct way to invest in natural gas. You can purchase and sell natural gas futures and options on the Chicago Mercantile Exchange (CME), an exchange for energy goods. You must have a futures account with a designated broker, also known as a
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During a recession, you might be tempted to sell all of your investments, but experts advise against doing so. When the rest of the economy is fragile, there are usually a few sectors that continue to grow and provide investors with consistent returns. Consider investing in the healthcare, utilities, and consumer goods sectors if you
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Business leaders and policymakers want to know how long it will take for the economy to recover after an economic boom ends in a recession, as it did when the real-estate bubble burst. According to research by Chicago Booth PhD candidate Yunzhi Hu, the recovery path is determined by the length of the preceding economic
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The Consumer Price Index (CPI) and the Personal Consumption Expenditures Price Index are the two most commonly quoted indexes for calculating inflation in the United States (PCE). These two measures use distinct methods for calculating and measuring inflation. What Is CPI Inflation? CPI inflation is calculated by the Bureau of Labor Statistics (BLS) using spending
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