Cobra Effect - Inflation 2021

[JohnyMac]

Cobra Effect - Inflation 2021

In my 2021 predictions which you can read here, reply #6 I predicted that inflation will be the name of the game in 2021. I have also posted in past economic threads that I suspect that it will be in the 7-9% range by year end.

In a previous post, I reported that my financial advisor chuckled at my prediction. She thought there would be inflation however, it would be less than 5%. Well I am seeing it locally in the home building industry, food, and fuel which I have reported on in past threads here at Unchanedpreppers.

There are two things I would like to report on today and one is that manufactures are continuing the old bait & switch tactic of putting less and less into a package. Case in point, Costco is dropping the amount of paper towel sheets in their standard house brand from 160-sheets to 140-sheets. A 14% decrease.

https://hip2save.com/2021/01/25/costco-is-reducing-the-size-of-paper-towel-rolls-to-avoid-shortages/

Keep in mind that if they reduce the size of a paper towel roll by 14% that equates to a 14% inflation rate. Add to that a price increase of lets say 5% (Same rate as my financial advisor predicted), that would be a 19% total inflation rate.

With the country now in $28T debt range and the sum rising daily, banks investing in stocks rather than mortgages & business loans, and we can all agree that the stock market is way over valued, I think my prediction of 7-9% inflation at this point is low.

In my opinion I think we are headed for a "Cobra Effect" in inflation.

Nom de guerre Tyler Durden from Zero Hedge has an interesting piece in the Dawson County Journal titled, We Are At The Early Stage Of The Biggest Cobra Effect In The History Of Economics. It is a short read and well worth your time. Here is a short copy & paste from the article,

"We believe we are at the early stage of the biggest Cobra Effect in the history of economics. As the massive monetary and massive fiscal stimuli (over $15T globally) conjoin to save the economy from a deflationary depression, instead they risk hyperinflation – overweight commodities.”"

With that written, what are you seeing going up in your neck of the woods? Please post it here to document the Cobra Effect of Inflation, 2021. 

In closing, MrsMac and I have recently gone on a shopping spree. We are filling the pantry as fast as we can with protein - Beef, pork, and foul. Our garden is in full swing with growing our seedling's and getting ready to plant in June. We have already planted strawberry's and am now looking to buy some fruit trees. My Alaskan Mill and new solar system should be arriving shortly.

DO NOT WAIT! Pay down your debt and load up!

 

[Jackalope]

Thanks for the advice, Johny.  We need to make a major food run soon, and Mrs. Jackalope is very particular about her food.  I also need to reeresh some of our fuel storage too.

[pkveazey]

Good post Johnny. I'm generally an Optimist when I think about my own situation but I'm the worlds biggest Pessimist when I think about the Country's future. I think inflation is going to be waaaaaayyyy worse than 10% to 12%. By next year at this time, I think we will see 25% inflation. I remember when a loaf of bread was 15 to 20 cents and yesterday I paid $3.25 for a loaf. I remember when a Hershey bar was 5 cents and now they are smaller and cost $1. I remember when a pack of cigarettes cost 20 cents and now they are about $6 where I live. Hmmmmm.......... What am I going to do when a Carton of smokes costs $200 or even $300? Yep, I've loaded up with as many cartons as I could afford and the day is coming when you see someone smoking a cigarette you'll think, "Hmmm... That fellow must be rich".

[JohnyMac]

Premium cigarette brands are $12.00 a pack in NY and $8.50 a pack here in PA.

If I lived south of the MD line, I would experiment with growing Tabaco. I heard you need nitrogen rich soil to grow year after year so critter manure would be needed in good supply, year after year. 

[Jackalope]

    I ordered some more canned chicken and rolled oats.  I need to make another trip over to our local Mennonite/Amish stores.  They have lots of items available in bulk.

[pkveazey]

Premium cigarette brands are $12.00 a pack in NY and $8.50 a pack here in PA.

If I lived south of the MD line, I would experiment with growing Tabaco. I heard you need nitrogen rich soil to grow year after year so critter manure would be needed in good supply, year after year.

Well, since I grew up on a farm and we raised a whole bunch of different crops, I picked up a piece or two of knowledge about what grows best in what sort of ground. Farmers think of the ground as light weight soil and heavy weight soil. Light weight soil is pretty sandy. Heavy weight soil has got some clay mixed in it. Pure clay is damned near impossible to grow anything. With that said, I have seen some Tobacco grown in the hill country and the soil had a lot of clay in it. I lived where it was mostly sandy soil. You'd be surprised at how innovative the old time farmers could be when it came to fertilizer. Today, they just buy factory made powdered or liquid fertilizer. Back in the old days, they'd use animal manure and even ground up fish. They learned the fish trick from the Indians. Some folks who have small gardens make Compost and use that. Making the damned Compost is harder than growing the crops because making good compost can be tricky and requires constant attention. My last resort is to plant a garden but I have what I need in order to do it. I've got lots of seeds(some hybrid and some heirloom) and one large bag of fertilizer. All the soil on my property is sandy. Farming is hard work and I'll only do it as a last resort. Don't forget about the critters that will come out at night and eat your crops.

[JohnyMac]

All good stuff PKv.

Our 2,000 sf garden is surrounded by a three strand electric fence powered with a solar powered controller and a car battery.  One strand is at about 6" from the ground then the next two runs of wire are at 3' and 4' on the step n' post. This seems to keep most of the critters out of the garden BUT groundhogs. That is why I got Mrs .22LR.

Last year, I also put up a 3' plastic chicken mesh fence to keep the chickens out of the garden. I leave it up till August-ish till the garden is well established.

Not perfect BUT it works in the 95% range.

Okay, food price report.

A roasting chicken on sale in my neck of the woods use to be 99¢ a pound. The last two cycles of roasting chicken sale price has been $1.15 a pound - A 15% increase.

On sale store brand flour use to be $1.99 for 5-pounds. This past Sunday it was ON SALE for $2.29 for a 5-pound bag. Oh my heavens, another 15% jump.

Yesterday, MrsMac and I drove to the local Tractor Supply, about a 45-minute drive away. As we drove past out local gas station, gas was $3.05 a gallon. On the way back the price had jumped to $3.09  gallon. Now that is only a 1.3% jump BUT 2-weeks ago gas at the same station was $2.99 a gallon or 3% less.

MrsMac and I use to belong to the local Sam's club located about 40-minutes away. We let our membership expire as we really do not like shopping there. Yesterday, MrsMac told me that we were going to renew our membership and stock up.

How are prices in your neck of the woods.

[JohnyMac]

Oh this just out, Bank of America warns of ‘transitory hyperinflation ahead’.

The Bank of America recently unveiled a stunner during its earnings call that suggested the nation is in store for “transitory hyperinflation.

What is hyperinflation?

[Kevin]

I'm expecting hyperinflation.

Here in N FL, food, fuel, animal feed, lumber, building supplies, home prices, raw land, etc. are all up. It seems everything is up. And I don't see it coming back down with the trajectory we're on in this country.

JohnyMac, make sure you match the length of your chainsaw bar to the Alaskan Sawmill. I've got one and didn't realize how much of the bar you lose on both ends when you secure it in the mill. I needed a new bar/chain to get the most out of mine.

[JohnyMac]

Thank you Kevin!

[Felix]

On the Alaskan Mill, cruise the chat boards and familiarize with engine power to bar/chain length.    Much better to have "LOTS" of HP on a "shorter" bar/chain than too much bar/chain for the engine, especially in a fixed position with the steady and prolonged load of an entire log.

[JohnyMac]

Gracious Felix.