Now that gasoline prices are on the rise again, it should be clear to everyone, with the possible exception of Joe Biden and his spokesperson, that inflation is still raging. The recent slight pull back in the government-reported rate–which is far less than the rate people experience outside of government corridors–was a temporary drop caused by the reduction in the cost of gasoline. Now that we don’t have that negative dragging us down, we should see October’s inflation numbers jump.
But rising gas prices are just the most obvious sign of inflation. You can’t help but see the price is up 14 cents when you drive down the road. Less obvious unless you set foot in a grocery store is the rising cost of food. That’s going to be far worst in 2023 as the effect of the poor harvests we experienced this year result in a food shortage next year. Shortages mean higher prices, which means more inflation.
This winter, we’re going to see higher heat prices and rising electric bills. That’s going to drive up inflation, too. The trifecta of rising prices, higher heating costs, and a bigger electric bill is going to make life a living hell for many Americans. That’s going to be compounded by plunging housing values as mortgage rates rise and the big recession we are heading into causes more layoff and store closures.
Is Hyperinflation in our Future?
Inflation is bad because your money becomes worth less and less each year. Hyperinflation is terrible because your money becomes worth less and less each week, or even each day.
When we have inflation, you notice it on a few items, but when prices rise slowly, it isn’t that obvious. When it affects things you buy every few years, it’s easy to miss inflation. For example, I get a new set of tires every four or five years, so I don’t monitor tire prices, but someone who works in the tire business says they are raising prices every two months. That’s getting into hyperinflation territory.
With hyperinflation, prices increases are not only obvious, they are in your face. There’s no avoiding it when the coffee you got today is more expensive than it was last week or when a six pack of your beer costs more every week, especially when this happens week after week.
What makes it worse is that your salary isn’t going up weekly. Hell, it’s not even going up quarterly. No wonder people don’t want to work; salaries are not keeping up with wages.
What to Do
If you are already living paycheck-to-paycheck, there’s not much you can do to mitigate the impact of inflation. Your best bet is to cut back on the quality and quantity of what you buy, look for savings where you can find them and buy things on sale.
If you have some savings, I would consider buying everything you foresee needing in the next year. Don’t spend everything; you’ll need a reserve fund if your HVAC goes out, or the car needs a repair. Take your excess funds and buy everything you think you will need or want in the next year. Start with obvious things like food and clothing. Then expand to tools, toys and other hardware. Buy Christmas presents now. If you think you might need canning jars, pick them up. Had your eye on a gun? But it an plenty of ammo. If you know you will need a new washer and dryer sooner than later, buy it now, before the price shoots up any higher.
Thinking about a small home renovation? Get an estimate, lock in a contractor, buy the supplies and do it now, before those items you need become too expensive or are unavailable.
Maybe buy yourself that new set of times.
All the money you have in the bank is becoming worth less every day. It’s losing its buying power. Spend some of it now before it loses any more.
Whatever you do, don’t buy on credit unless they give you zero interest. Don’t run up your credit card bill. Some of the card rates are in the neighborhood of 30 percent.
You can also buy gold or silver as a hedge. If you have hundreds of thousands of dollars, you can buy real estate. Rental properties might be a good buy, especially if you wait and snap up distressed properties. They have the advantage of producing income, but being a landlord can be a hassle.
You may be asking yourself, “Why should I worry about inflation when there’s a war in Europe, an election here in less than a month, and Putin is threatening to nuke our asses?” The answer is because Putin might nuke us and if so, there’s not much you can do about it. Inflation is here now, and you can still take action to minimize its impact on your life.
Of course, it doesn’t hurt to prepare for Russian nukes, North Korean missiles, a Chinese invasion of Taiwan, and the other wars brewing. Oh, and id you see that But if you’ve been a prepper for long, you know there are always threats.