Posts Tagged: Inflation

Podcast: Inflation 101

Jeff Bennet joins us for todays podcast and talks about inflation.

What happens to America and Americans, if what happened to Argentina, happens here?  It is logical to find out if it could happen here.  I say it is almost unavoidable, and my reason is simplicity and logic 100%.  Why could it happen here?

This is Jeff Bennett for the Preparedness Podcast, with another installment of Perspectives on America, ‘Short Takes on Wealth – 104.’ It has been sopme months since I have ben with you, but the questions remains, “Why could it happen here?”

More importantly, “Why couldn’t it?” In tonight’s installment, we will endeavor to discover the comparisons of 20 years of Argentine financial mismanagement as we delve into “Inflation 101: Back to Basics”

In the podcast, Jeff refers to a couple of graphs, which are below:

Annual Consumer Inflation

Annual Consumer Inflation

Consumer Price Index

Consumer Price Index

Just In Time inventory showing its weakness

I stopped by Walmart in my local area on a whim to check for ammo and I wasn’t surprised to find nothing more than shotgun shells and odd-calibre stuff.  An employee stopped my to ask if I needed help and we began talking about the ammo and shortages everyone seems to be experiencing.  The employee went further and told me about how they hadn’t even had a truck arrive the day before and how is caused all kinds of problems for the store and then pointed to the shelves and explained that while there was still much on the shelves, many of the common items had been spread around to take up empty space, while others were just plain out.

I thanked the employee for his time and took a stroll around the store to see this for myself, the guy was right, the shelves were spare or compeltely bare of some items.  Things that I noticed as being the most affected was ammo (of course), snacks items, beverages, food staples, frozen items, household (soap, laundry detergent, etc), stationary, and writing supplies.  I didn’t check the hygeine and personal care isles, nor did walk through the medication section.  A lot of this all fits into the catagory of common every day items we use.

What does all this mean?  regarding ammo, demand has been up for sometime and I wasn’t surprised to find little available.  As to the rest I’ll go out on a limb and assume for the sake of my argument that demand has remained steady.  So what’s the deal?  Well, it all comes down to supply and how that supply gets to stores to be sold.  If you remember Greg’s article about the Baltic Dry index, you’ll remember that shipping rates have essentially dropped to zero which caused large numbers of ships to be parked, This is because trade is down–no one is shipping anything.

All that brings me to my last point, Just-In-Time or JIT shipping.  The link can explain JIT better than I, but essentially it’s an inventory business model that brings goods to a store just as it’s needed, hence the terms Just-In-Time.  This system is all and good until you disrupt any part of the system.  A disruption in supply, demand, transport, anything will result is a rippling effect that can have far reaching results depending on the specific disruption.

Why do I prep?  The supplies that I need can very easily, in the space of hours, become unavailble.  It may be a minor inconveinence until supply is disrupted or transport is disrupted for anylength of time.  Demand skyrockets, prices skyrockets, people become desperate, desperate people do desperate things.

Right now we are seeing the ripples started months ago buy a drop of in trade (transport) because of a drop off in supply, and a decrease (world wide) demand.  Now things are becoming scarcer, it subtle now, but can easily and quicly become more pronounced.

Empty containers clog South Korean Port; Container ships sit idle; Idle container fleet grows.

Mike@prepcast.info

Free Money! Free Money! Free Money!

Yup, that’s basically what it is. Free. The Federal Reserve has dropped the Prime Lending rate to 0% – 25%. That’s basically free to borrow money.

Not money that you and me can borrow, but banks and other financial institutions. They borrow from the Fed and then loan it to people like us. The Fed raises and lowers rates in order to control the money supply and this lowering is their further attempt to boost the economy.

But it’s not working.  Markets are still down, companies are still laying off employees and slashing salaries. Dogs and cats living together. It’s the end of the world!

Okay, no, it’s not the end of the world. It might be the end of the world as we know it, though. Banking and financial institutions are being shaken up enough that the fallout and resulting social, legal, governing and financial changes may be so great that it’s possible that we won’t see the prosperous conditions, like we saw in the middle of this decade, again in our lifetimes. 

But, that’s the future and no one can foretell the future, so let’s concern ourselves with what’s happening right now.

Right now, we are in a slight deflationary period. That means that the prices of some things are going down. Most prominently are energy costs, specifically gasoline and diesel. We’re also seeing huge cuts in prices on retail goods as stores are trying to lure more customers in order to keep the revenue stream coming in. All bets are that this will not last, as the pressure of inflation starts to take over (all those trillions of dollars that they’ve been printing up will cause inflation, if not hyperinflation).

Take advantage of the lower prices and do what you can to increase your supplies. No one knows how much time we have, but everyone seems to think that next year is going to be really bad.

There are a few categories that are not in a deflationary period: Guns, Ammo, Gold and Silver. These items are going up because of the current demand.

- Rob

‘12 Days of Christmas’ Items Would Cost Over $86,000

‘12 Days of Christmas’ Items Would Cost Over $86,000

While this little funny, tongue in cheek article is only slightly amusing to most people, there’s a real piece of data that we should all be looking at:

“The price is up $8,508 or 10.9 percent, from $78,100 last year.”

Hello? Not one mention of inflation in this article. 11% rise in prices in just one year. Keep that in mind the next time you hear that the National Inflation Rate is about 4% – 5%.

- Rob

$7,700,000,000,000!

So, you really believed the Federal Government when they said that it was only going to cost the American Taxpayers $700 Billion for the bailout. I don’t think the ink was even dry on that paper when it already began to increase. The Federal Government is prepared to give away $7.7 Trillion dollars of your money. Isn’t that nice of them? Read the Bloomberg article.

I don’t remember giving anyone in the government permission to spend our money like that, but they’re doing it anyway. Why? Because they can. What does it mean? It means we’re in for a whole lot of hurt.

Seven trillion dollars represents about half of everything that was produced in the US last year. With the way that things are going, it could be all that we produce next year. Whether we approve of it or not, we Americans are responsible for this debt.

They are running the Treasury printing presses non-stop. This is insanity. It seems that everyone is too big to fail except the US citizens, who will have the pleasure of getting to hold the short end of the stick. Again.

Folks, massive inflation is headed our way. See the posts below for more information, but I don’t see how this ends up on a good note.

If you don’t know who David Walker is, check out the video below. It was recorded at the beginning of the year. See how much if it has already come true. Hang on people, this horror movie has just started.

- Rob

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