Inflation Survival

By Jennifer Hopfinger
July 22, 2008 04:57 PM

Ah, summer. Weekend getaways. Backyard barbeques. Time to relax and enjoy. But that's harder to do this summer, as the cost of such simple pleasures take a much bigger bite out of your wallet.

According to Money Magazine's July cover story, "The Ultimate Inflation Survival Guide," the cost to fill up a Chevy Trailblazer is $90, 20 percent more than a year ago. And the cost of hot dogs is 7 percent higher, buns 15 percent more expensive, and ice cream is up 6 percent.

The article, by Amanda Gengler, Janice Revell, and Penelope Wang, tackles the three big questions on everyone's minds: How bad is it right now? How bad will it get? How will it affect me?

The article offers some consolation. Inflation isn't up that much. But the products that are going up the most are things we buy frequently: food and gas. So it seems like inflation is worse than it is. Then, the writers sock you with the bad news: inflation could potentially get a lot worse, especially when it comes to food and gas, because supply isn't keeping up with voracious global demand, especially from China. The article gives a good explanation of what the Fed does--and has done in the past--to try to control inflation.

We're largely at the mercy of the markets when it comes to purchases--no matter what the magazine's "18 Ways to Beat the Rising Cost of Living" says--but there are things we can do to protect investments from inflation, which is what is covered in the second part of the article. Topics tackled include Treasury Inflation-Protected Securities, commodities, real estate funds, and blue-chip stocks.

Not exactly easy beach reading, but the article is worth a look to put the current situation in perspective and get a clue about what to do.

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Copyright © 2008 Donald W. Reynolds National Center for Business Journalism