Despite all the various ways in which Americans have been and are affected by inflation, the following reality is the most current and realistic explains ValueMags President, Andrew Degenholtz: Consumers rack up debt on their credit cards that are either unsecured at changing rates or are tied to whatever equity they have with their mortgages. If rates rise even to 5% for a variable rate five-year term, how can the American government expect individuals to be able t afford their homes and stay in them?To elaborate, small increases in inflation and interest rates could be detrimental to borrowers, especially mortgage owners, because Americans have allowed themselves (the banks and government too) to accumulate endless debt. The American economy is operating below its potential output though which means that the United States Government has no reason to raise interest rates which are directly correlated with inflation.
In short, ValueMags researchers and president believe that American’s lives are adversely changed by fluctuating inflation rates. The main issue for American citizens is how their employers react to rising inflation. When inflation rises, it is not mandatory for employers to match inflation therefore the cost-of-living for individuals rises too. In some cases, the cost-of-living rises dramatically and citizens are forced to move out of their homes and sell their most valuable assets. The observations of various journalists above are justified. Through careful research and interviews, the realities of Canada and inflation rates have been proven with interviews of affected individuals and shocking statistics. The qualitative effects of inflation and interest rates are more and more obvious as we head into 2017.