In another thread it was suggested that we are at risk for high inflation. How would you prep for inflation?
High Inflation
- Thread starter Caribou
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I'm retired. Well actual I'm self employed working for room and board.
1. Higher gasoline prices would not effect me very much. I'll just stay home like I do now.
2. I'm debt free. No concern about higher mortgage rates, or credit card balances.
3. Food prices would ding me a little. Still have to buy food. I'm not a big or picky eater. Would miss Culver's cheeseburgers.
4. Higher interests rates should drive my bank savings and 401K upward.
1. Higher gasoline prices would not effect me very much. I'll just stay home like I do now.
2. I'm debt free. No concern about higher mortgage rates, or credit card balances.
3. Food prices would ding me a little. Still have to buy food. I'm not a big or picky eater. Would miss Culver's cheeseburgers.
4. Higher interests rates should drive my bank savings and 401K upward.
I'm thinking more of a hyperinflation situation. I too would drive less but I might pick up more fuel storage. Being debt free should be every preppers goal. LL your post made me think about CC debt. If inflation was 1000% or even 100% carrying credit card debt at 22% wouldn't be nearly as bad as it is today.
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Not sure ,its hard enough to prep in good economy. We can a lot of beans and carrots.
The way we did it in the late 60's through till very early 80's (during 22.9% inflation) was purchase raw land real estate and dispose of paper securities holdings.
Also purchase as much stuff at the early stage as you will ever use, early in the inflation cycle. Things like clothing, tools, storable food, paint, really anything you will need in the future. Things......including land and vehicles will escalate. Debt is your friend through out inflation cycle.
Assets like cash, stocks, bonds, annuities, will deteriorate in value. Real touchable things like gold and silver and art work go up in value.
Take my stash of emergency money and buy more wheat, sugar, yeast, coffee, vinegar,baking soda,gas,dog food,wood pellets,bras,underwear,socks,work gloves,firstaid supplies
I have no idea what the hubby would do
If farm land crashes over the next couple years, caused by current tariff wars, buying farm land would be prudent if expecting inflation.
Note: This "Worldwide Tariff War" is part of an intentional effort to trigger high inflation. This is an international effort. The only way to pay off 22-trillion dollars debt is to debase the currency through high inflation. This is why hard assets like gold is accelerating.
Note: This "Worldwide Tariff War" is part of an intentional effort to trigger high inflation. This is an international effort. The only way to pay off 22-trillion dollars debt is to debase the currency through high inflation. This is why hard assets like gold is accelerating.
YOU are 100% correct.
Another thing to plan for, High Inflation triggers constant labor strikes and shorter term negotiated labor contracts, massive civil unrest. Being in states and cities that are currently bankrupt will suck, as they well have no room to settle labor strikes, property tax and sales tax will rocket upward.
As stocks and bond values erode in response to higher labor costs and raw material costs, the pension funds holding those assets will be forced to reduce pension payments substantially, and raise union dues.
As stocks and bond values erode in response to higher labor costs and raw material costs, the pension funds holding those assets will be forced to reduce pension payments substantially, and raise union dues.
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Also plan on emergency enforced wage and price controls.
At the time when everybody would need more money instead of cuts.
I'd suspect the CC companies would revise their interest rates and have them in the mailed before the ink dries.
The pension funds are underwater in an over priceed securities market. If for example the S&P 500 dropped say 60% or 80% then the pensions would be worthless.
Things could certainly get bad, just nobody knows for sure. So your first step to get ready is to prepare for nothing happening. When done with that step then prepare for the possible bad times.
Today they came and filled my new 500 gallon propane tank. I plan on just leaving the valve turned off on that tank and just keep it for bad times. That full tank would last me about two years of average use. Just one of my steps to prepare.
Today they came and filled my new 500 gallon propane tank. I plan on just leaving the valve turned off on that tank and just keep it for bad times. That full tank would last me about two years of average use. Just one of my steps to prepare.
I worry much more about a recession than inflation.
A recession can happen in a matter of months and can take 6 years to climb out of. I don't have that many 'spare' years left.
Inflation takes years of totally stupid decisions by the government to fester (Yes, I was around during the Jimmy Carter years
)
Yeah, wear a sweater and have a wood fireplace, that's the ticket!
The government did learn a thing or two especially when it comes to not doing stupid stuff. They keep an eye on inflation now.
If it begins to raise it's head they quickly put the smackdown on it. Of course, that only works if there are smart people in government.
And actually, since we have moved to an almost 'cash-less' economy, it is much harder for the government to "print" more money and cause inflation.
The 'electronic dollars' never wear out so the government has little excuse for printing and dumping tons of it into the system in hopes that everybody will magically be "richer".
(yes, we've been that stupid before)
A recession, on the other hand, only takes one magically-stupid person in the wrong place to make everybody's life needlessly suck, for years.
Voting matters.
(Did I mention that the economy today is better than it has been in 25 years?)
A recession can happen in a matter of months and can take 6 years to climb out of. I don't have that many 'spare' years left.
Inflation takes years of totally stupid decisions by the government to fester (Yes, I was around during the Jimmy Carter years
)Yeah, wear a sweater and have a wood fireplace
, that's the ticket!The government did learn a thing or two especially when it comes to not doing stupid stuff
. They keep an eye on inflation now.If it begins to raise it's head they quickly put the smackdown on it. Of course, that only works if there are smart people in government
.And actually, since we have moved to an almost 'cash-less' economy, it is much harder for the government to "print" more money and cause inflation.
The 'electronic dollars' never wear out so the government has little excuse for printing and dumping tons of it into the system in hopes that everybody will magically be "richer".
(yes, we've been that stupid before
)A recession, on the other hand, only takes one magically-stupid person in the wrong place to make everybody's life needlessly suck, for years
. Voting matters.
(Did I mention that the economy today is better than it has been in 25 years?
)
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It would seem the Fed does not fear inflation right now since they just lowered interest rates. I'm not sure exactly what they are seeing coming b/c they don't normally lower rates in a good economy. Lowering interest rates is the opposite of what they would do if they were concerned about inflation.
That's not to say inflation couldn't be a problem on the horizon, but it's not a concern of mine at the present. I did however, stock up on some things we wanted to buy before the tariffs hit. Hubs wanted a fancy fishing pole and cooler for fishing/hunting and I got a nice electric and battery operated fan. We got Christmas presents early.
That's not to say inflation couldn't be a problem on the horizon, but it's not a concern of mine at the present. I did however, stock up on some things we wanted to buy before the tariffs hit. Hubs wanted a fancy fishing pole and cooler for fishing/hunting and I got a nice electric and battery operated fan. We got Christmas presents early.
The US bond curve has been inverted for months. History shows that happens just before a recession.
Gold and silver have held steady prices for several years. They have both just went up rather dramatically. Another bad sign.
US personal debt is over 4 Trillion dollars and sets a new record every month (as does our national debt). Another bad sign.
Our nation has Never been this divided. That has to be bad.
Negative bond rates are common in the world now. This has Never happened before. That likely is not good.
The list of bad things is long. Could mean nothing or could mean bad times are coming.
Gold and silver have held steady prices for several years. They have both just went up rather dramatically. Another bad sign.
US personal debt is over 4 Trillion dollars and sets a new record every month (as does our national debt). Another bad sign.
Our nation has Never been this divided. That has to be bad.
Negative bond rates are common in the world now. This has Never happened before. That likely is not good.
The list of bad things is long. Could mean nothing or could mean bad times are coming.
Oh, it's a given.
Only questions: When, How bad, and How long.?
And that is why we are on this homesteading/prepper website. To try and get ready.
Strange as it may sound, the best prepping you can do is borrow money now.
With either inflation or a recession, that becomes difficult/expensive and nearly impossible to do.
If you were thinking of replacing a vehicle in the next couple of years, locking in a long term low-interest loan now would look like a stroke of genius in hindsight.
As Angie_nrs said in post #16:
She's right. They have no choice but to raise interest rates when inflation happens.
I remember thinking I had won the lottery back in the day when I qualified for a "low" 10.5% FHA fixed-rate 30-year mortgage.
(The going rate was 13% and up
).One of those burns you for years and years.
And it's easy to find yourself priced-out of the market for a decade or more. Just my
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I'm seeing real inflation right now. Government reports seem to disagree, but things like hotel rooms have jumped *a lot* in the last year and a half. I can't get a room at a Super 8 for less than $79 any more. Non - staple groceries seem to be climbing quickly. Clothing seems to be going up too.
We are headed into a recession, no doubt. Rail shipments are down, and that is typically a sure fire indicator of a coming recession...
We are headed into a recession, no doubt. Rail shipments are down, and that is typically a sure fire indicator of a coming recession...
If you listen to the president 'railing' (pun) against the Federal Reserve for not cutting interest rates more/faster it's obvious they (The Fed) are monitoring inflation as well as the economy.
It's easy to see why a government would cut interest rates to make their economy run 'faster'. But what happens when you hit 0%?
You just keep lowering them
.That's right, in these countries if you buy government bonds, instead of them paying you interest, they charge you for the privilege of holding the bonds.
Steemit said:
But it's like the patient getting hooked on opioids. Sure, he never complains... until he needs another fix.
....and when you run out of dope, it turns real ugly
.People eventually realize that the interest rate is fictitious because nobody is investing, borrowing, or loaning money based on it.
Then lowering it more has no effect, and the
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Our Kroger store had signs up on canned food "temporarily out of stock". First week I've seen that there. Walmart has had them up for awhile. Kroger here had 4 cans of canned corn in a plastic pack for $2.19. Exact same product in Kroger Kansas store for $1.99.
1974 I was making $5 a hour until gasoline jumped to $1. I was out of work for 9 months. Found a job at $3.84 a hour and I walked the three blocks to work. Married with no children. House mortgage was $84 a month, 10 year loan.
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I think those price increases in service industries have a lot to do with the labor market. Right now (at least in my area) employers have to increase wages and benefits in order to get workers, and even then, they are having trouble filling positions. Anyone who can pass a drug test and really wants a job can get a job at starting at $12.....increasing up to $15 after 3 months with full benefits and OT available and sometimes even mandated. It is a factory job, but definitely a good wage. These places are constantly advertising on the radio and I am in a fairly rural area.
Those summer, low paying (typically high school student jobs) are abundant around here and going unfilled. We rarely go to restaurants, ice cream shops, tourist spots, etc. in the summer b/c you are gonna wait a looooooong time to get served. I remember when I was a teen and we were fighting to get those jobs. Apparently that is not a problem these days. It's sad. I got some great experience and had a lot of fun in my younger days with summer jobs. Today's kids are missing out on a great opportunity to have fun, get skills, meet new people, and make some cash.
Personally I don't think taking on debt is a good strategy no matter what the economy is. IF you were thinking of pulling the trigger on getting a mortgage right now, then I think this is a great time to do it. Other than that, debt is not something I'd get cozy with.
@angie_nrs I agree about debt. Debt just makes one a slave to his/her lender. Unfortunately it is sometimes necessary...
Again, she is 'right on the money' (another pun
).This is the downside of having a historically good economy and historically low unemployment. But it is a good problem to have
.And the reason I had to move to an 'undisclosed location' when I retired to get away from work.
If you think they are grasping at straws for inexperienced workers, try walking around with a price on your head because you have certifications and special skills.
They will hunt you!
There are even billboards down here trying to get people to learn welding that are elbowing out the 'big-truck-accident-lawyer' signs
."Learn, Burn and Earn!"
Start at 55K per year!
You know you want to!
Back on topic, if they keep an eye on inflation and resist the knee-jerk reaction every time the stock market takes a dip, we'll be ok.
@Spikedriver, I haven't had debt in a decade, but you have to think about a young family trying to pay rent and save up enough to buy a house outright.
They will have a brand-new house, about the time they retire
.The only thing worse, is them buying a house... with a 13% interest mortgage.
They'll still own a house when they retire, but it will be 30 years old.
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^^^ The skilled labor shortage is no joke. Where I work, if you have a welding certificate, and a class B CDL with hazmat, you'll be making $31-32 per hour within two years after you hire on. If you're female and have those credentials they'll pee all over themselves to hire you, for diversity. But when I tell young people about this, they look at me like I'm an idiot. I guess youngsters don't want to do the good paying blue collar work any more...
SPike is right. Skilled folks under 40 are hard to come by. We just finished interviewing about 30 canidates for instrument technicians. This round of interviews had some of the most talented we've looked at in a while. We hired 4 of them. But the youngest of them is pushing 40. I'm not so concerned with them being older as they are usually more stable and better expereince. But there will be a bunch of retirements in 20 years. I'll be long gone by then. But we are dealing with the same thing now. In the next 5-7 years we'll probably lose 10-12 techs and 5 of 8 of our managers, including myself. I've got one tech leaving in 2 years and another in 5. Plus one thats going to be having knee surgery soon. Once that one is healed he'll get the other replaced. He seems to have something every year that keeps him out till his FMLA is about to expire. So I expect he'll be out 6 months at least. I just had one come back from a month of FMLA and another with knee replacement that was out 5 months. We are stretched very thin and I'm over working my other guys just trying to keep up. A prime task for me is to pull together some numbers to go to the boss and try to get a new tech hired. They won't be able to walk in a hit the ground running likely, but I can at least get some depth and do some much needed cross training.
I like the job I have now. Get up in the morning and look to see if there are any elk in the yard. Have breakfast and look at the weather to decide if I should go for a hike or maybe take the boat down to the nearby lake. Then have to do it all again the next day.
