19% inflation not 9%

Interesting observation and opinion about inflation in the U.S. from inflationchart.com (made by @levelsio) –

Inflation is actually 19%, not 9%.

Actual numbers are being downplayed.

You’re now losing 19% of your money to inflation per year or 1.43% per month. At this rate, in 4 years over 50% of your money has evaporated.

That’s slightly over double of the forecast.

It looks scary.

I’m no expert economist, but I can go with the idea that the numbers don’t always reflect reality, and that downstream, real prices of goods might increase even more than 19%, but some might decrease too.

Perhaps the real impact on the ground depends on what you spend most of your money on:

Inflated prices:

• Housing
• Food & beverage
• Textbooks
• Childcare
• Healthcare

Deflated prices:

• Clothing
• Software
• Toys
• Cellphone service
• TV

Sadly, we can’t avoid food and drinks, housing, healthcare. The costs of our core consumption goes up, while the nice-to-have goes down.

That’s the counterintuitive thing - when times are tough, we intuitively cut down on the luxury spending, nice-to-have spending, when it’s actually the basics that need to be reviewed.

Of course, those are U.S. inflation numbers. Singapore’s forecast of inflation for 2022 is ~5%. Lower, but perhaps will rise as the year progresses. Which makes me wonder how much exactly that 5% is downplayed… If by the same multiple as the US (i.e.e double - 9% to 19%), then it’s like 10% or more? Caveat: Pure conjecture there, but concerning nonetheless…

I don’t understand the economics too deeply, but my main noob takeaway are:

• find ways to earn more (at least 20% more) instead of just saving as whatever money you hold will decrease in value
• review spending on consumption basics that’s most affected by inflation
• even investing in crypto isn’t a hedge against inflation that high anymore

What else can we do to hedge ourselves against inflation this high?