The war in Iran is barely two weeks old, and people are panicking. Not about Iran attacking us. Not about sleeper cells or lone-wolf terrorists. No, they are panicking about the economy.
I’d like to think the U.S. economy is strong enough that a few weeks—or even a few months—of war in the Middle East won’t take us down. I expect we’ll bounce back.
Concerns may be justified if we are still at war in August, but my guess is we won’t be. There may be some ships and aircraft in the region, just to mop things up, but I don’t think we’ll need to keep up the pace of these attacks for too much longer.
Yes, when I filled up my tank last Friday, gas was 52 cents per gallon higher than it used to be. And yes, it once again costs more than $50 to fill my tank when it is below a quarter full. But I remember the first time it cost more than $50, and that was in 2008. So when you consider the effects of inflation, the true cost of a gallon of regular unleaded gasoline is far lower today than it was then.
Of course, it doesn’t hurt that I don’t drive that often. If gas jumps another dollar, we’ll do what we’ve done before: be careful to make the most out of each trip. That means we won’t run out to get the mail—a 12-mile round trip—unless we have to drop off the trash and run a few other errands at the same time.
Some People Need a Reason to Complain
Some people are never happy. You could give them $1 million, and they’d complain about the taxes on it. As long as Trump is president, a segment of our society will be unhappy. Iran could surrender next week, gas could sink to $2.39, and they’d post stories saying gas was lower under Bill Clinton in the 1990s.
Other people are scared. They don’t know what is happening, so they panic. Their mental “what ifs” run rampant, keeping them up at night, and they overreact, spreading panic. Sure, the worst-case scenario may be ugly, but when was the last time we witnessed the worst-case scenario?
None of us knows what is going on in Iran. We can watch the mainstream media, the alternate media, random live streams and posts on X, but we’re getting somebody else’s view flavored by their opinions and desires. Maybe even by Russian and Chinese-controlled bots, or Iranians using AI to make themselves look good.
Just look at Iran’s new Supreme Leader as an example of the lack of hard information. Is he dead? Did he lose a limb? Was he sent to a hospital in Russia for surgery? I’ve heard all three rumors but seen no confirmation. All we can do is look at the facts: no one has seen him in person, and the only statement he released was written and could have been produced by anyone. That tells us something, but it doesn’t tell us if he is dead, injured, or lying low to avoid being targeted by Israel.
The Economy Isn’t Great, but It May Be Resilient
When Russia went to war in Ukraine, it was hit hard by U.S. sanctions. In response, they moved to a war footing, strengthened their ties with China, sold cheap oil to India, allied themselves with Iran, and survived. I expect the U.S. and its economy will survive, too.
When you look at the facts, the U.S. economy is still suffering lingering effects from quantitative easing (QE) and other decisions made in 2008. It has barely recovered from the pandemic, which shut the country down, planted the seeds for inflation, and drove up the deficit.
While I don’t think the economy is in great shape, I think there was plenty of economic disruption before the war in Iran. Gold and silver are up for a reason. Food is more expensive, which makes life hard for many people. The continuing pace of societal change and AI emergence will cause more employment disruption, and that’s bad for the economy. But will this war be the straw that breaks the camel’s back? I doubt it, but we have to wait and see.
Some economists predict a recession (some economists are always predicting a recession) while others don’t. Eventually, there will be a recession, whether or not we have a war in Iran. They are inevitable, but that doesn’t mean there will be one this year. The jury is still out, but if the war lasts six months, that may push the economy off the ledge. Or not. Experts can predict. I can guess. Neither of us knows.
Are you Prepped for That?
I’m prepped for financial distress. The next recession won’t be my first, or even the second I’ve lived through. I’d much rather experience the slowdown and deflation of a recession than a super-heated economy that brings inflation or, worse yet, hyper-inflation. If either of those strikes, I’ll avoid buying things and live on what we have or can produce. That’s what our preps are for.
The key to surviving a recession is to have an income stream. If you lose your job during a recession, you are in for tough times. If you can stay employed, you can weather a recession and come out stronger. Inflation is more difficult because even if you keep your job, it will no longer pay the bills.
One reason I prep is so I don’t have to worry. I may get annoyed by rising gas prices, but I don’t worry about them. I have 50 gallons of stabilized gas in cans and another 60 to 65 in the tanks of different vehicles and tools like generators and log splitters. That should reduce my need to buy gas for some time.
I don’t worry about putting food on the table because our food storage is measured in years. Yes, we’ll be eating lots of rice, beans, and sourdough bread made from the whole grain we grind, but we won’t go hungry. And we’ll have an occasional can of corned beef hash, chili, or Spam to spice things up.
Self-sufficiency isn’t something you can buy when the financial crisis hits; it’s something you build before things heat up. If you haven’t made a good start, do so while you still can.
