As we are now in the full force of the Holiday Season and have just finished feasting on the bounty of our Thanksgiving dinner there are many residual impacts from the festivities. Our waistlines certainly feel the effects of the delicious turkey, pumpkin pies, and yeast rolls that we heartily consumed. However, this 2020 Thanksgiving has seen other changes as well. Compared to a 2019 Thanksgiving, our wallets are roughly 9.8% trimmer due to rising costs of Thanksgiving delicacies.

 

There could be a myriad of reasons for the inflating cost of food in this country, including supply chain disruptions due to the Covid-19 pandemic and the impact that continued monetary stimulus has on the worth of the US dollar. Regardless of the reason, 9.8% is a significant increase in the cost of food from one year to the next.

 

AdvisorSmith did a recent study on the cost of typical American Thanksgiving fare in 2020 when compared to the cost in 2019. The foods analyzed included turkey, potatoes, cranberries, squash, sweet potatoes, corn, green beans and pumpkin. It also included baking and bread products such as flour, white bread, milk, eggs and butter. The findings of the study may surprise you.

 

Turkey: The star of the Thanksgiving meal increased on average by 12% from the previous year. This is a significant difference when you consider a typical annual inflation rate is roughly to 2%. According to the National Turkey Federation the number of turkeys raised on US farms was down slightly from 2019 as well. There were 229 million turkeys farmed in 2019 compared to only 222 million in 2020. The total number of turkeys has decreased by 27% since it’s peak in 1996.

 

Vegetables: A necessary component to a Thanksgiving feast, we have also seen changes in the cost of vegetables in 2020. Prices of vegetables increased by 7.4% on average from October- mid-November 2020, compared to the same time period from the previous year. So, your pumpkin pie, sweet potato fluff, and green bean casserole cost you quite a bit more in 2020.

 

Baking Supplies: Baking supplies can include things such as butter, flour, eggs, milk and white bread. We all know how many sticks of butter goes into a mouth-watering Thanksgiving meal, so these items, while small, can play a role on the cost of your dinner as well. On average the cost of baking supplies increased by 7.1% from October- mid-November from one year to the next.

 

While supply and demand strain related to Covid-19 restrictions can be blamed for some of the increased expenses in popular food items, another thing worth considering is the strength of the US dollar. Goldman Sachs, Standard Chartered Bank and Citibank are all predicting a “a weaker US dollar” in upcoming months. Citibank is anticipating as much as a 20% decline in 2021. A weaker US dollar means a trip to the grocery store will begin make a significant dent in your paycheck. A gallon of milk in 2019 cost only $2.90. Today that cost is on average $3.40/gallon and milk is only the beginning…

 

For Americans, as the dollar weakens and the Fed continues to use monetary easing to stimulate the U.S. economy, inflation will rear its ugly head making it increasingly difficult to maintain the standard of living we are used to. As food and other goods increase in price, we may have to make choices to purchase less expensive items, or to forego certain favorites altogether.

 

One certainty amongst so many unknowns is the role of gold and silver in wealth protection. If you were to bring a pouch of silver coins up to the counter to purchase your Thanksgiving dinner, you would be pleasantly surprised to see how gold and silver are not impacted by inflation. Your gold and silver investments retain their value in spite of growing uncertainty surrounding the US dollar. The single most important way to inflation-proof your wealth and secure your future standard of living, is to increase your holdings of physical gold and silver. Conventional wisdom states your clients should have 10-20% of investible assets into the pre-1933 wealth insurance.

 

Prices are still low thanks to the “strong” dollar, which provides the perfect opportunity to insure clients’ wealth while you still can.