2022, you have impoverished us

With the exception of lottery winners and those who have enjoyed exceptional promotions at work, most people have become poorer in 2022.

2022, you have impoverished us

With the exception of lottery winners and those who have enjoyed exceptional promotions at work, most people have become poorer in 2022. Inflation, that cancer of the economy, had been forgotten for a few decades. In 2022, she slyly came back to haunt us.

The year 2022, with this poisoned gift, will have impoverished households in several ways.

First, the rise in the price of several essential goods. With the usual paycheck, a consumer would face long in front of grocery counters or gas stations. To have less for one's dollar is necessarily to feel poorer.

Following the same reasoning, all those who had put a little aside saw their savings lose value. I am thinking in particular of retirees.

You had put a few hundred thousand dollars in the bank for retirement, inflation has eroded the purchasing power that your savings grant you. Seven, eight percent in a year, it seems.

Hard, hard, for investments

To protect themselves from inflation and to improve their retirement, households therefore make investments. There, too, inflation torpedoed everything. Mutual funds or ETFs, stocks or bonds, it's all there.

Returns have not only been negative, they have been awful, making 2022 one of the worst years in the last century in financial markets. Many of you no longer even dare to look at where your investments are.

Inflation also has another effect: forcing central banks to raise interest rates. But not an ordinary rise. Not normal, quarter-point adjustments. Rates have simply exploded in just nine months, leaving households neither time to see ahead nor time to adjust their plans.

The impoverishment of households therefore also took place through significantly increased interest payments on mortgages. Hundreds of dollars each month subtracted from a budget already battered by general price increases

I could certainly include in this impoverishment the collective aspect. Our governments (especially the federal one) have skyrocketed their debt levels since the pandemic. We will also have to pay for this for decades. Our children too. Need I remind you that governments are not exempt from raising interest rates on their huge debts?

Positive

On the positive side, what is there at the end of the year?

A labor market that offers opportunities. A person who wants to work a little more should be able to do so. Having a second weekend job is not necessarily easy. But for a time, it will be a happier solution than handing over the keys to the family home to the bank.

And then 2022 ends and a new year always allows us to hope for the best. This should not prevent our governments, whose excessive spending has contributed to the nasty inflationary surge, from learning the lesson.

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