“From the packaging to the transportation and the energy used in manufacturing, nearly all aspects of the production of foods now cost more”— Paul Ebeling
Most investors probably believe that inflation is something that just happens. That is incorrect and failing to invest with a proper understanding of inflation may cost those investors dearly.
The reality is that, like Milton Friedman famously said, inflation is always and everywhere a monetary phenomenon.
The history of prices from the 19th Century until Y 1913 was one of slow and gentle declines, as increased industrial production led to more goods becoming available at lower prices. But since the creation of the Fed in Y 1913, inflation has become the norm.
We now expect prices to rise in the future without end.
Every now and then inflation gets so bad that everyone has to sit up and take notice. For the past 15-20 yrs, inflation rates have been relatively low, allowing many people to ignore inflation and its pernicious effects in raising our cost of living. But suddenly, on Mr. Biden’s watch prices have exploded. From food to cars to houses, the cost of everything is rising.
The commodity boom has led to talk of a “supercycle”, a term used to describe a period of abnormally strong demand that pushes up prices, in some cases for a decade or more. In recent wks, the price of Key raw materials including copper, lumber and iron ore have hit all time highs.
The reopening of hospitality and food service businesses is adding to the pressure cooker situation.
For consumers that’s a major blow because they have been shut for 12 to 18 months and have lost a lot of money. There is no way these companies can sustain increases like this, they have to pass it along.
Food price inflation is going to go through the roof for consumers. It has to.
And with wages not rising nearly as fast as prices, many households are between a rock and a hard spot.
A Key perverse aspects of inflation is that it disincentives savings and investment. But, protecting your retirement savings means taking action before the economy begins its downturn.
So, if you are worried about the potential for stagflation and are looking to find out more information about how crypto, gold and silver could help protect you, follows me in this column daily. Do not let your hard-earned savings fall victim to the ravages of inflation.
Have a prosperous weekend, Keep the Faith!