For A Reminder Of What Inflation Does To Your Money, Check Out The 'Cost Of Living' In 1938

Economists who have loudly and consistently predicted the onset of runaway inflation ever since the Fed launched “quantitative easing” have been completely wrong.

But there’s no denying that even a moderate rate of inflation destroys the value of money over the long term.

For a quick reminder of this, check out the “1938 cost of living” snapshot below. It was recently tweeted out by “Classic Pics.”

Harvard Tuition: $US420 a year.

A gallon of gas: 10 cents.

Movie ticket: 25 cents

Postage stamp: 3 cents

Average income: $US1,731 per year

House: $US3,900

Yes, this was still in the middle of the Depression, when prices were low. But still.

It’s scary to invest in stocks, because you can lose a lot of money quickly. But over the long haul, stocks offer inflation protection, because companies pass price increases through to their customers.

If you just hoard cash for the long term, meanwhile, you’re pretty much guaranteed to lose. And how.

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