Why US money printing matters for Australian families and businesses

There’s a lot going on with money printing at the moment.

It’s starting to feel a bit like 2006 again - a couple of years before the Global Financial Crisis (GFC). Back then, I thought it was all pretty exciting - I didn’t really see the danger in it or think it would hit us at home - but what might have seemed like an American problem actually flowed through to everyday life for Aussie families and business owners. Let's pay attention now; it's very likely to affect us all again.

In today’s world, cash isn’t as safe as it seems. Like holding an ice cube on a summer’s day – bit by bit, it melts away.

What’s happening and why it matters

The US government is about to borrow a lot more money. When they do this, they often print more dollars to help pay for it. This doesn’t just affect the people in America – it can change how much your savings are worth, what things cost to run your family and business, and how you plan for your financial future.

1. Cash savings lose value when more money is printed

When the US prints more money, the value of each dollar drops. Over time, this means your money won’t stretch as far and everyday costs can quietly rise. And sometimes, they rise loudly.

For Aussie families and businesses, this means your bank balance might look the same, but it won’t stretch as far as it used to. What you're already feeling is about to get a whole lot worse.

Action: Don’t let your cash just sit there. Keep what you need on hand, but think about putting longer-term money into high-interest accounts, mortgage offset, or investments that keep up with inflation like index-linked investments or gold.

2. Currency changes and rising costs affect everyday life

If the US dollar drops in value, the Aussie dollar can become stronger. This can make it cheaper to buy things from overseas, like electronics or cars, but it can also mean local businesses face higher costs and some prices at home go up. Home loan rates and business borrowing costs could also go up if global interest rates rise.

Action: Review your home loan and business loans, along with any other debts, to see if you’re getting a good deal. Make sure your deal is sharp.

​

3. Business owners and investors need to watch for new risks and opportunities

If the Aussie dollar goes up, it can be harder for some businesses to sell overseas, but it’s easier for families to buy things from other countries or travel.

When money moves around the world, there can be new chances to invest ...but things might also get a bit shaky.

Action: If you run a business, check your prices often and make sure you have enough money set aside for tough times. Some professionals will talk to you about not "putting all your eggs in one basket" and spreading your money across many investments. They say that this is safe for your wealth. Personally, I'm not always in agreement with this. Sometimes you just need to find the thing that is right for you, at that right moment in time, and then go all in. But this is a bigger discussion than we have time for here - just planting the seed.

​

Final thought

The best way to protect and grow your wealth is to take action early. Talk with your family to make sure your plan is up to date and ready for whatever comes next. Do you even have a plan? Is now the right time to gather your accountant, financial adviser and broker together and work out your very own master plan? Let me know if you need my help to coordinate this.

More soon.