In our frequent discussions of inflation and supply chain problems (see here for a recent article), some may have become "punch-drunk" to the point that they've switched off further discussion. Others appear to have decided that since there's nothing they can do about it, they may as well not bother. Sadly, such reactions are what's making the problem worse. Those responding like that are, in essence, expecting the supply chain and inflation to be "fixed" or "solved" by someone else, so they can "get back to normal". Both demands are non-starters in practical terms right now. To ignore the problems, or demand that others - government, big business, whatever - solve them, is to set ourselves up for failure. If we do that, we're living in cloud cuckoo land rather than the real world. We have to take steps ourselves, and take them right now, to avoid being steamrollered.
One of the things making the situation worse, in my opinion, is the ongoing refusal by the mainstream media to challenge the government's deliberately slanted, optimistic portrayal of the rate of inflation. We've spoken about this often in the past. The real rate of inflation, as being experienced right now "on the street" by tens of millions of consumers, is vastly higher than what the government is prepared to admit. As I said in the linked article above:
To know the true rate of consumer inflation in the USA, take the official rate declared by the government and multiply it by 3½. The result will be much closer to reality.
I've seen nothing since I wrote those words to make me change my mind. That means, whenever you read an article citing a ridiculously low inflation rate, it's lying to you by not admitting that cost increases are actually much higher than that.
For a quick summary of what's really going on with consumer inflation and the supply of goods, here are some recent headlines.
- Kraft Heinz says people must get used to higher food prices - "The cost of ingredients such as cereals and oils has pushed global food prices to a 10-year high, according to the UN Food and Agriculture Organisation. Kraft Heinz has increased prices on more than half its products in the US, its home market, and Mr Patricio admitted that is happening elsewhere too. "We are raising prices, where necessary, around the world," he said.
- Heads Up! New Food Shortage! - "Augason Farms ... has ceased production for the next 90 days due to 'supply line disruption' ... I went to their website and there's a notice: "Due to an extremely high order volume through all sales channels we are currently not able to receive any orders through our web site." So yepper they're out. For 90 days."
- Conagra Announces Food Price Inflation Likely to Remain Around 11 Percent Through 2022 - (remember, multiply that 11% by a correction factor!) - "This is terrible for wage earners in the U.S. who are now seeing no wage growth and higher prices. Real wages are decreasing by the fastest rate in decades. We are now in a downward spiral where your paycheck buys less. As a result, consumer middle-class spending contracts ... Gasoline costs more (+50%), food costs more (+10% at a minimum) and as a result, real wages drop; disposable income is lost. Ultimately this is the cause of Stagflation. A stagnant economy and inflation ... This inflationary period will not stall out until the U.S. economy can recover from the massive amount of federal spending. If the spending continues, the dollar continues to be weak, as a result the inflationary period continues. It is a spiral that can only be stopped if the policies are reversed…"
- Dollar Tree breaks the $1 barrier as costs take a bite - "Dollar Tree is breaking the mold and will sell items in some locations that exceed the tantalizing $1 grab-n-go price. The cost of clothes, cars, food and just about everything else has soared this year as the global economy emerges from a pandemic uppercut and Dollar Tree has not been untouched. Last month the retail chain said that rising shipping costs would take a bite of $1.50 to $1.60 out of its per-share profits this year. That’s a huge hit for any business ... Raising some prices will certainly give the national chain some flexibility and likely more variety on its shelves. But a dollar this year will not buy you what it did in 2020."
- No supply chain recovery before Q4 22 - " 'Supply chain turmoil will last longer than thought,' says Drewry in its latest Container Forecaster report ... 'The deteriorating situation makes us think the problem is much deeper-seated than feared, with the pandemic bringing forward latent crisis within certain sectors' ... it is forecasting 'a significant increase in contract pricing, leading to an increase in average global pricing of about 6%'."
- America Is Running Out of Everything - "One-hour errands are now multi-hour odysseys. Next-day deliveries are becoming day-after-next deliveries. That car part you need? It’ll take an extra week, sorry. The book you were looking for? Come back in November. The baby crib you bought? Make it December. Eyeing a new home-improvement job that requires several construction workers? Haha, pray for 2022 ... the world is getting a lesson in Econ 101: High demand plus limited supply equals prices spiraling to the moon."
When did you last hear President Biden or any senior government official speak about, or acknowledge, any of those problems, or those headlines? You haven't, because they're ignoring them. They're concentrating on COVID-19, and alleged (but in reality non-existent) "right wing extremist terrorism", and defending their stolen governance with increasing desperation.
Friends, I hate going into debt to finance short-term expenditure, but right now, I have no choice but to do so myself, and I advise you to do likewise (within reason). We aren't going to be able to get many of the things we need over the next year; so, if it's an essential, or you're likely to need it this winter (e.g. emergency heating if - or should that be when? - the power fails), get it now while it can still be found, even if it costs you more. If it's not essential, do without it. We've been preparing as best we can within our limited means, and I'm grateful to the good Lord that we've been able to do so. There are those who can't afford to, and I'm truly sorry for them. If you have close friends and family in that situation, you might want to consider helping them out, because we're all going to have to get through this together.
If you want a secular anthem to help you get through these hard times, Jethro Tull has provided one.