Indeed, banking regulations such as the Dodd-Frank reform are prompting banks to increase fees or deliver fewer services, said Albert Lu, managing director and chief portfolio manager of WB Advisors.
Other analysts are more wary of the administration being concerned about the cost of producing pennies in the first place.
“The fact that the government can no longer afford to mint token coins economically using copper is a sure sign of monetary debasement run wild,” said Albert Lu, managing director and chief portfolio manager of Woodlands-based WB Wealth Management.
Other threats include unexpected illness or disability; early job loss; inflation: rates higher than 2-4% could prove problematic; extraordinary low fixed-income yields that penalize savers; rising tax rates as governments attempt to close fiscal deficits, and stagnant real estate prices are just a few, points out Albert Lu, managing director of WB Advisors.
Time to panic?
The good news is that deflation is not the most likely outcome of the current economic environment.
That deflation worries are hanging over the economy at all is the bad news.
“When an economy experiences deflation, the purchasing strength of its monetary unit, the dollar in our case, increases, meaning the prices of all goods — including labor — experience downward pressure,” says Albert Lu, principal at The Woodlands Bullion Company in The Woodlands, Texas.