People ask me all the time, perhaps because they know I have an opinion, “What are your thoughts on the economy?”
All I really know to say is this: I’ll take whatever comes my way in business as long as I can get good business opportunities. And that is exactly what we have been doing at The Interface Financial Group. Business is up just a tick under 100% year over year through April.
Will it stay that way? Nope! Simply because I feel like this is only a phenomenon known as the “velocity of money.” You see, inflation has already happened and now we are seeing the results. Gas prices are nearing an all time high, food, diapers, paper products, anything made with plastic and delivered by truck are all going up in price nominally. In reality, the value of the dollar is declining and countries are not wanting to own our bonds, hence the Federal Reserve is buying Treasury Bonds to the tune of over 70%.
Now to the “velocity of money.” It simply means that people do not want to hold onto anything that is losing value and that would be the US Dollar that they rely on to buy the necessities and the toys that the think they’d like to own. This could be (I’m not saying it is) the real beginning of the end for the Dollar. But velocity of money takes place prior to all huge or hyperinflation destruction of a currency. It will happen sometime if it is not happening now.
Hopefully, this is not the time and we’ll just go along growing the business of IFG where we purchase accounts receivable to advance our clients the cash they are waiting to get from their good paying customers. We do this so they can sleep better. This would be the “good'” thing.
If however, it is the velocity of money, then that really is “bad.”
Regardless of which it is, you need to be aware that there is a problem with the Dollar that we will ultimately have to face.
Inflation robs savers. Take that statement as an alert or warning to prepare yourself for everything you buy to cost more.
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