Ken Brackett has always contended that the Customer Price Index (CPI), is really a faulty measure of inflation. Incidentally, the CPI is what the cost of living adjustment for Social Security Income (SSI) is linked to. If you believe that your SSI is not maintaining pace with the rising price of living, you are right. What's frustrating is the fact that oftentimes when SSI is adjusted upwards because of the CPI, there's generally a corresponding increase within the Medicare part B premium. Among the shortfalls from the CPI is the fact that it excludes two of the greatest costs that we face these days: energy and food. All of us know that the cost for power and food have elevated dramatically.
Numerous people are concerned about inflation and the dollar loosing worth more than time. The good news is the fact that there are inflation linked securities that really profit in the increase in inflation. Once again however, this profit is tied to an increase in inflation as measured by the CPI.
Over a long run schedule, Kenneth Brackett feels that this country will see a lot greater inflation then the 3% that we have noticed for a lot of years. Many seniors keep in mind the early 1980s when we had double digit inflation. Because of the Federal Reserves intervention, Ken Brackett believes that we'll see inflation stay low via 2016. Component of this really is due to a Fed target inflation price of 2% and to the fact that the Fed will keep the overnight lending rate to much less then 2%. As a result, we'll see the bond market continue to go stale and equities ought to continue to do well (particularly if the Fed continues their bond purchasing program).
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