Ken Morris: Don't let inflation deflate your resolve

The Federal Reserve is tasked with being the gatekeeper of our economy. They don't propose or implement programs or policies; that's the province of the legislative and executive branches. The Fed has just two mandates. One is to achieve and sustain maximum employment and the other is to keep inflation under two percent.

Currently, inflation is running significantly higher than two percent and, in an attempt to get it in check, the Fed is aggressively raising interest rates.

One of the contributing factors to our inflationary environment is the national debt. It's right on the cusp of a staggering $31 trillion. Over the years, our elected officials have spent money far in excess of our revenues. As much as politicians would like to ignore basic mathematics, at the end of the day two plus two will always equal four. It doesn't matter if elected officials imagine it to be some other number.

Politicians may be well intentioned, but it's their excessive money printing and spending that are fueling the flame of inflation. No matter the cause, it's brutal for everyone. I suspect most investors are looking at their statements in disbelief. Many stocks are well below their highs and bonds are taking it on the chin as yields continue to rise.

It isn't very often that both stocks and bonds fall in tandem, but they definitely are now. Historic safe havens such as gold and other commodities are not faring well either, and those speculative investors who've been dabbling in the world of crypto currencies have also taken a beating.

Interest on bank deposits may be increasing, but the credited interest rate is far below the current rate of inflation. It's a simple fact that times are difficult for everyone. Keeping your head above water is virtually impossible.

At the end of the day, most people are taking a financial step in the wrong direction. You can argue about whom to blame, but there's no question that we're all experiencing sticker shock and shrinking account values. We're constantly reminded every time we drive past a service station, stop at a grocery store, buy just about any item or pay a bill.

How is the Fed's effort to slow the economy and corral inflation working out? Well, according to their most recent statements, it seems they've abandoned the goal of a soft landing. Which means we're likely to have a bumpy, hard landing leading to a recession or, even worse, a deflationary environment.

So what can you do? Well, keep your wits about you for starters. Panic as a strategy never works. You can't put your finances or your life into a protective bubble. You can't wish away falling investments or rising prices.

It might help to review history and put current times into perspective. We've been through difficult times as a nation before and somehow have not only survived but eventually thrived.

There was out of control inflation in the 1970s. Day by day, it was painful, especially locally because so many car buyers borrowed money to finance the purchase. High interest rates were painful for both the auto industry and the consumer just as they are today. We got through it then and

I'm confident we'll get through it again. Just tighten your belts and be patient.

Email your questions to ken@lifetimeplanning.com

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The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results.