Australia’s Inflation about to soar

#inflation #costofliving #costofliving #economy #money #gold #bitcoin

Well it only took a month after the. May 25 Australian Federal Government elections and the M3 Money Supply has jumped from 5.96% YoY to 6.77% YoY (as at the end of June 25). Expect a bigger jump next month.

The growth in money supply directly affects prices in an inflationary manner - that’s why most western governments print money like crazy to pump a slowing economy. In doing so governments debase your money. Based on Australian M3 growth your AUD one dollar will only buy AUD 93 cents of goods compared to a year ago. By 2030 at this rate it will be AUD 72 cents.

The growth in M3 and debasement of your money really only affects the first recipients of the new money. Subsequent recipients effectively receive less value as the first recipients have caused demand-driven price increases - known as the Cantillon Effect.

If the Reserve Bank of Australia (RBA) reduces interest rates in August 25 - expect the flow on effect to be significant encouraging more borrowing and spending driving up prices. Michelle Bullock, as the face of the RBA has been steadfast in moving slowly (very good), but I believe external pressures will result in a rate reduction in August. How much? Unless they step away from 25 basis point moves my bets are marginally on a 50 point reduction.

Gold continues to show the underlying real debasement of 38.8% pa movement. So if you think your cost of living in some areas has gone up 20+ or 30+ percent then you are probably correct.