Soaring Costs Pinch Budgets
and Pinch Pennies
Even as certain leveraged asset prices continue to sink, the cost of everyday needs continues to rise, particularly food, health care, education, and travel. Becoming more effective at insulating yourself from the ravages of inflation is the name of the game, and helping you do so is a core purpose of the services we provide to our readers.
Soaring Costs Greet Air Travelers
If you’re planning on taking any trips this summer, plan for higher costs. Airfares are up about 8% from last year and are up even more for international destinations (in part due to new airport taxes). Hotel rates are up as well in most locations.
You can often reap significant savings compared to published Internet rates on airfares and hotel rooms by going through an old-fashioned travel agent. It’s assumed that the opposite is the case by people who attempt to do the travel-booking grunt work themselves. But depending on the destination and the accommodations desired, a travel agent may be able to obtain special deals and discounts not available directly to consumers.
The Penny’s Continuing Saga
Reveals Washington’s Financial Irrationality
Pennies now cost the government 2.4 cents each to produce, inclusive of raw materials and minting costs. The real value of a single cent is now so pathetically small that the government can’t even conceive of a way, using any materials or methods, to produce a penny within the cost of the penny’s one-cent value. According to CNNMoney, “even though Treasury has been studying new metals since 2010, it has yet to come up with a workable mix that would definitely be cheaper.”
Nevertheless, the Obama Administration is intent on debasing both the penny and the nickel to try to cut the losses the government incurs in minting them. Administration officials recently asked Congress for permission to change the metallic composition of the coins (pennies were made of copper through 1982 and have since been composed mostly of zinc; nickels are still 75% copper and 25% nickel).
While the U.S. struggles to scheme up new methods of debasement to make continued circulation of its nickels and pennies practicable, Canada has wised up to the sheer futility of continuing to circulate its pennies. Canada will cease minting pennies altogether this fall, and business are being encouraged to round all transaction amounts to the nearest 5-cent increment.
Issuing money that can’t buy anything, anywhere, and costs more to produce than it’s worth. It really does speak volumes about the irrational actions being pursued by America’s monetary authorities, doesn’t it?