Inflation and World War II

My wife and I recently went on a cruise with the National World War II Museum to the Mediterranean Sea.  The cruise focused on the North Africa invasion of 1942 and continued to the Gothic Line in Italy until the ultimate victory of the Allies in 1945. As a history lover, I really enjoyed seeing these places come alive and see these sites with my own eyes. 

It is a common phrase we hear that “history repeats itself,” and that can be for the good, the bad, and the ugly. Upon return from our vacation, I was reminded that our economic history often repeats itself, or at least looks to repeat similar patterns. While we often immediately look to the most recent times in history of similar nature - times that we remember inflation or market volatility happening - it can often be more accurate to look back further to get a closer comparison with today.  

Americans have suffered through inflation before, but often “experts” only consider the precedent from their lifetime — which is the inflation of the late 1970s and early 1980s. However, this article looks back to other periods of inflation and market volatility and shows that the closest comparison with today is the time directly after World War II, from 1946 to 1948, when inflation peaked at 20%. Dwight D. Eisenhower once voiced one of my favorite quotes: “Plans are nothing. Planning is everything.” He went on to explain that when planning for an emergency, the very definition of “emergency” means that we weren't expecting it. It is very likely that things won't go according to plan.  There are times to adjust our planning. I encourage you to read this article to gain some perspective (by brushing up on your history) on our country’s current financial situation. While we can’t control everything, there are some things we can manage. As your Financial Advisor, I’m here to help and ready to answer any questions you may have. Read Article Here: Financial Times | For lessons on fighting inflation, skip Volcker and remember 1946