Amidst Unyielding Inflation, Americans Find Themselves 'Livin' on a Prayer

In the face of adversity and economic challenges, today's inflation report have brought more unsettling news for Americans and investors. It seems that we're all echoing the timeless lyrics of Bon Jovi's anthem, "Livin' on a Prayer,” with hopes that inflation returns to the past decade normal and grapple with a harsh economic reality that continues to test our resilience.

A Misleading Year of Expectations

Over the past year, the government and legacy media assured us that a soft landing and a return to normal were on the horizon. However, today's report on price increases shows a stark contrast to that promise. Many of us are down on our luck, as investments fail to help us get ahead. The bond market has experienced a significant crash the worst in US history, with interest rates hovering around 5%. As a result, Americans are just barely getting by, with wages struggling to keep up with inflation, forcing many to work multiple jobs not just to achieve their dreams but simply to stay afloat.

Inflation: The Unrelenting Foe

The relentless foe behind this uphill battle is none other than massive government deficit spending. In the past three years, the government has increased the money supply by a staggering 30%, leading to an equivalent loss in the purchasing power of the dollar since 2020. The consequences are clear, and they weigh heavily on the average American's shoulders.

The Hard Truth: A Shrinking Dollar

To put this in perspective, if your salary was $100,000 in 2019, you'd need to earn $130,000 today just to maintain the same standard of living. Unfortunately, many Americans have not seen such increases in their income. With no signs of inflation slowing down below 4%, if this trend continues, in just another 10 years, by 2033, you'll need an annual income of $200,000 to purchase the same goods and services you enjoyed with a $100,000 salary in 2019.

This scenario is the most likely one as it is based on historical annual inflation averages since 1971 at 4%.  But this will just be keeping up with the cost of living not surpassing it, especially considering higher tax brackets, which could result in less take-home pay relative to the rising costs of goods. It's a challenging reality that many are starting to recognize and now are taking on a more profile stance or fight. As Bon Jovi aptly sang, "Oh, we've gotta hold on, ready or not, you live for the fight when that's all that you've got."

A Glimpse at Today's Inflation Data

The Coastal Journal this week isn’t breaking down the price increase categories since the increases are so drastic now that everyday Americans are witnessing these price increases in their day-to-day expenses, from home utility bills to the gas pump and the grocery store. The inflation problem can be solved, but the real question is when the government will take action to address it by reducing the deficit, raising taxes, and reduce government spending? Today, we're all living on a prayer that this inflation can be tamed, maybe a change in 2024 can make that happen, but until then, everyone right now is echoing the sentiments of Bon Jovi's timeless refrain:

“Oh, we’ve gotta hold on, ready or not

You live for the fight when that’s all that you’ve got

Were half way there Oh, Living on a Prayer

Take my hand and we’ll make it, I swear

Whoa OH, Livin on a Prayer”