Will global product shortages cause hyperinflation?
Product shortages were already becoming an issue in early 2020. The cargo ships started backing up. Sometimes waiting 2 weeks to be unloaded. At either the port of Los Angles or Long beach. It is unusual for more than a few ships to have to wait more than a day or two.
As the holiday season approached in 2020, more goods were being sold online than ever before. Almost half of these goods had to pass through one of these two ports. These ports simply could not keep up. Adding to the problem many dock workers were either sick with covid or were in quarantine mandates. As if that wasn’t enough, the cost of shipping containers doubled and shipping cost went up.
Due to lockdowns in the U.S., there weren’t as many containers going out as coming in. For every 100 received only 40 went back. There is now a shortage of shipping containers in places like Asia because they are sitting empty in places where they are not needed. The problem is they don’t have the time to load empty containers and send them back. Additionally, it is not cost-effective to load and ship empty shipping containers. This disruption is now having global effects on shipping. At the same time, there was a shortage of truck drivers due to “you guessed it, Covid restrictions.”
“Just an observation” If you are in the market for an empty shipping container, they might be some for sale at a discount.
Product Shortages will lead to Hyperinflation
There are many reasons to be concerned about hyperinflation. For example, trillions of dollars have been printed and passed out in the form of stimulus plans. Interest rates have been at zero and will remain there for the foreseeable future. The government is not even trying to fight inflation. They know they can’t tax their way out of the problem. This is a huge problem in which I will get further into in another blog post. For now, we are talking about shortages and hyperinflation.
Many companies operate on a thin margin and don’t stockpile goods. So when production was disrupted and demand slowed, many of these companies sold assets to stay afloat. Now that demand is back, they are scrambling to catch up.
So what does this have to do with prepping? Well, now that you know what the problem is, you can prepare by buying products that don’t need to be shipped. Don’t wait until you need something to order it and forget about last-minute Christmas Shopping.
This will affect us going forward. While companies are scrambling to restore normalcy to shipping, it’s going to be a long time before things get back to normal.
People are starting to realize there is a huge problem with supply. Panic shopping is already happening. More people every day are waking up and seeing the need for preparedness. As preppers we are ready, but just in case you haven’t heard. Shortages in all products are about to get worse. Even if it’s produced near you, the manufacture may have a problem getting materials to produce goods.
Some stores are already limiting the amount per customer on certain items.
Items to stockpile before hyperinflation hits
- Food; It is always a good idea to have a few month’s supplies of food on hand. Prices are already up. The cost of expanding your freezer capacity might pay for itself in the near future.
- Water; Grocery stores are already limiting bottled water purchases. It might take a few trips to get stocked up. But don’t pass on larger container sizes. If you can get a water filtration system and refill bottles. It is not a given that water bottle manufacturers will have the sources they need to produce bottles.
- Medicine; Pain relievers, Anti-inflammatories, cold medicines, fever reducers, antibiotic creams, bandaids, and just general first aid supplies.
- Fuel sources; Propane, butane, charcoal, lighter fluid, or whatever supplies you might need to cook some food in a power outage. I also like to have extra propane for Mr. heater buddy (indoor safe heater) Candles are always nice to have for lighting in a power outage or to save electricity.
Often overlooked items
- Tools; With the price of goods and services going up, it’s a good idea to fix or build the things you can. Tools come in handy for do-it-yourself projects.
- Clothing; many clothing products are made in other countries and get shipped to us. So, make sure to have enough clothing, shoes, jackets, gloves for all your family members.
- Pet supplies; Don’t for about the critters.
- Self-security; Guns, ammo, mace, motion detectors, security cameras, and of course dogs. These are all deterrents for the opportunist looking for an easy target.
- Batteries; It almost goes without saying, yet batteries are often overlooked until you need some. So, get stocked while you can.
- Barter items; many barter items are available at a dollar store. candles, matches, toothpaste, hygiene items, batteries, medicine, paper products, just to name a few.
- Gold and Silver; When inflation hits gold and silver a popular safe haven against a falling dollar.
- Paper products; After Covid-19 hit it seemed like toilet paper and paper towels might be more important than all other items. Not true, but still important. So, get some stocked up.
- Firestarter; If you have a fireplace, wood-burning stove, or firepit, get stocked up on firewood and firestarters.
- Extra income sources; This is the one I missed during covid lockdowns. I only had one source of income. When we had no work I found myself digging into savings to pay bills. So, try to set up multiple sources of income if you can.
In conclusion, product shortages are here and promise to get worse as the world tries to get back to normal. In my opinion, there is a lesson to be learned. We as a country need to be more self-sufficient.