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IRA Financial Blog

Inflation – Episode 262

Adam Talks

IRA Financial’s Adam Bergman Esq. explains what the COVID-19 pandemic has done to the economy and why inflation will have a huge impact when it comes time to pay back the government for all the spending it has done to boost the economy.

As you all know, COVID-19 has had a disastrous effect across the world. Hundreds of thousands of lives have been lost so far. The economy has taken a nose dive with so many people out of work and businesses closing across the nation. As you know, the government has tried to do their best to help boost the economy by way of stimulus packages. However, that money will need to be paid back at some point. A major concern, and the topic of this podcast, is inflation. What will happen in the near future with so much going on in the world right now. Listen to Mr. Bergman’s thoughts in the latest episode of Adam Talks.

What is Inflation?

Inflation is defined as the rate at which the the value of a currency is falling and consequently the general level of prices for goods and services is rising. The three main functions of a currency are as a unit of account, a medium of exchange and a store of value. It is that last function that is most important. Ideally, a central bank would want its currency to retain its value over time. And if there are too many dollars in circulation, the monetarists would say that the value of those dollars has diminished, eventually leading to higher prices for things.

It took a while, but it seems as though the U.S. government has decided that it has no constraints on its spending, as long as the Fed continues to monetize government borrowing by purchasing the debt issued to finance expenditures. It’s not crazy to think government spending may reach $10 trillion – for just one year! And the numbers will go up from there. 

Cash is bad during times of inflation. In fact, in our next podcast, we will go more into detail about why cash is trash! Many people are looking into alternative ways to save and invest in. Real estate, precious metals, and now, Bitcoin are at, or near, all time highs. All should be looked at as possible investments, especially when held inside a tax-advantaged retirement plan.

What’s Next?

We can expect an additional stimulus package from a Biden administration. Republicans and Democrats have, for months, clashed over the size and scope of a stimulus package to prop up the economy. Senate Majority Leader Mitch McConnell has sought a slimmer aid bill similar to the $500 billion measure that Democrats have twice rejected. Congressional Democrats favor a broader multi-trillion-dollar plan that would include more stimulus checks, more federal unemployment benefits and more funds for testing and contact tracing.

Of course, as the government continues to spend, eventually it will come to a head. No one knows how big a new stimulus package will be, but what we do know is that Biden has proposed a $4 trillion economic plan over ten years.

We can expect several trillion more in cash circulating around the economy creating even more opportunity for excess inflation to rear its ugly heard.


Without going into too much detail, inflation is sure to be a big concern. Listen to the podcast to find out more about what you can do to protect yourself and your finances. Thanks for listening and be sure to check out our SoundCloud page for more episodes! Feel free to contact us if you have any questions about saving for retirement during these uncertain times.


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