Worldwide inflation - how do you deal with it?

[8Ball]

So the inflation numbers in the US for March came in at 8,5%, which is quite high. This trend is worldwide with inflation rising pretty much all over the world, and it seems like it's going to continue to go up fpr quite some time.

Inflation is devastating for our purchasing power. How do you deal with it?

Personally I try to adjust my lifestyle right now. I want the most bang for my bucks. This means I'm cutting down on my vegetables (unfortunately), drive less with my car, buy food that's on sale and so on.

Diesel is $10 a gallon where I live. Tomatoes is up like 100%. Potatoes at least 30%.

By carefully planning what I spend my money on and adjusting my lifestyle I don't feel the effects so much of inflation right now except for my electricity bill which is up an insane amount.

[Preety_India]

I'm eating less. 

 

[Yarco]

There's a bullwhip effect coming... all those goods that were sitting offshore on ships or unable to be transported are about to flood the market. For a little bit, prices will seem to stop inflating or maybe even drop for a bit. Goods will be in abundance. It'll look like all the economic problems are behind us and everything is back to normal. But really this is like being in the eye of the storm. This is maybe your last chance to stock up on whatever you want and need before the next big downturn.

Since shops will be full of goods, they won't be placing orders and manufacturers will start ramping down production. When shops finally run out and go to re-order, there's going to be another wave of shortages. Things are going to look good again and people will feel comfortable starting to put money into savings. What they don't realize is that this will slow the economy down even more as they're taking more money out of circulation.

Higher interest rates, more savings. All the goods on the market get consumed and there's nothing to spend the money on. Then there's nobody manufacturing, then there's nobody working. Then the real depression begins. I'm giving it more or less 6 months at this point unless something big changes.

You should be finishing your preparations. You've had since March 2020 when you first saw the toilet paper madness to see how fragile our supply chains are. Unless you have investments that are making 8% a month or more, it's time to start putting your excess money into physical goods you can actually use. If you have enough money, buy land and real estate. If you're a normal person, I would buy at least a couple months worth of nonperishable food... bags of rice, pasta, etc. and stock them away for the hard times that are coming.

Deodorant, shampoo, soap, garbage bags... whatever you're constantly consuming that doesn't have an expiry date and doesn't take up a ton of space, stock it up. If you see any items like that on sale, pick up 4 or 5, or whatever you need for the next year or two. In this scenario, counterintuitively buying as much as you can is how you actually save money. Because if you buy that stuff now, you won't have to pay 30% more for it in a couple months. If you need to buy a new lawnmower, or a new pair of shoes, or to buy a bunch of lumber for repairs and renovations, or anything else, now is the time to do it.

If you're already running short on money, idk, I guess pick up some extra shifts or take an extra part-time job while you have the chance. Then don't save that money, immediately invest it into goods.

Edited April 12, 2022 by Yarco

[Preety_India]

The best advice. 

Spend as minimally as possible. You'll thank me later. 

 

 

 

[zurew]

8 minutes ago, Yarco said:

If you're already running short on money, idk, I guess pick up some extra shifts or take an extra part-time job while you have the chance. Then don't save that money, immediately invest it into goods.

How big of an inflation do you expect for the next 2-3 years?

[Yarco]

1 hour ago, zurew said:

How big of an inflation do you expect for the next 2-3 years?

Official inflation numbers are not really a useful metric at this point. They can change what items are or aren't included in the consumer price index, which is used to determine inflation. Look at the original post... inflation was 8.5% in March on paper, but anyone actually doing shopping is seeing price increases of 100% on many items already. So the only way to get real inflation numbers is to make a sheet of historical prices for various items and compare them over time. It might even be area-specific and certain things might be going up in price in your state or country but not others.

It's not just the inflation that cripples you anyway, it's the deflation that comes afterwards too. During the Great Depression, prices of everything actually dropped 20-25%, because nobody had money to buy anything. Falling prices mean less profit for businesses, which means lower incomes and higher unemployment for workers. It turns into a reinforcing circle that's very hard to break.

There's too many moving parts for me to try and guess where things will be in 2 or 3 years. I just have a feeling that more likely than not, things are going to get pretty bad this winter. I felt the same for the past 2 years, and they've kept artificially pushing it back. But all the warning signs just keep getting worse and worse.

First they denied there was inflation, then it was transitory, then it was just for a little bit, then they acknowledge it's worse than expected but surely we must be near the peak. Now even world leaders are warning of food shortages. Delaying doesn't make it go away, it's just building up over time and getting harder to hide or continue pushing back. Eventually has to all come undone.

Edited April 12, 2022 by Yarco

[hoodrow trillson]

Personally, I would take anything somebody from these forums says about the economy with a grain of salt.

All we can do is shop for cheap, thrift and buy second hand stuff that's in good condition.  Just save money with sales.  It all adds up!  Thankfully, I'm a bit of a mechanic so I can maintain my car by myself easily but the other stuff, yeah that requires a little more research and cross shopping.

Just try to enjoy your life and you gotta pay to play right now for important things unfortunately.  

[Hardkill]

6 hours ago, Yarco said:

Official inflation numbers are not really a useful metric at this point. They can change what items are or aren't included in the consumer price index, which is used to determine inflation. Look at the original post... inflation was 8.5% in March on paper, but anyone actually doing shopping is seeing price increases of 100% on many items already. So the only way to get real inflation numbers is to make a sheet of historical prices for various items and compare them over time. It might even be area-specific and certain things might be going up in price in your state or country but not others.

It's not just the inflation that cripples you anyway, it's the deflation that comes afterwards too. During the Great Depression, prices of everything actually dropped 20-25%, because nobody had money to buy anything. Falling prices mean less profit for businesses, which means lower incomes and higher unemployment for workers. It turns into a reinforcing circle that's very hard to break.

There's too many moving parts for me to try and guess where things will be in 2 or 3 years. I just have a feeling that more likely than not, things are going to get pretty bad this winter. I felt the same for the past 2 years, and they've kept artificially pushing it back. But all the warning signs just keep getting worse and worse.

First they denied there was inflation, then it was transitory, then it was just for a little bit, then they acknowledge it's worse than expected but surely we must be near the peak. Now even world leaders are warning of food shortages. Delaying doesn't make it go away, it's just building up over time and getting harder to hide or continue pushing back. Eventually has to all come undone.

It looks like there's some good news on inflation coming down soon according to economist Paul Krugman, https://www.nytimes.com/2022/04/12/opinion/inflation-consumer-prices.html

He also say that he really does not see inflation in the long-run as being permanent like it was in the 70s to early 80s. 

Edited April 13, 2022 by Hardkill