Talking about uncomfortable stuff – the economy

Yesterday I went to pick up a long awaited package from the post office. It was mistakenly sent to a location two hours from me, then sent back to the central processing center, then finally arrived back in my area.

It wasn’t fun or easy dealing with Amazon regarding this order, and I wondered if I was going to have to accept the package was lost, along with my money. I was relieved when I finally got the notice it arrived.

I had wanted to order two of this item (it was a set of five toy cars, a gift to be split for children and grandchildren), but waited to confirm that first package made it before buying another one. After picking it up, I logged on to order a second set, to see the following message:

“Currently unavailable. We don’t know if or when this item will be back in stock.”

I checked other sellers – one other seller had it for close to fifty dollars – for an item that five weeks ago cost $22.

I kept looking. I found the same toy cars being sold individually for $11 each (totaling $55 instead of $22). That’s a serious price increase. And my item isn’t the exception – I was notified that a different toy I was considering buying went up over 30% a week or two after I put it in my cart. The prices have risen significantly on many items that I looked at.

I’ve been watching the worldwide economy pretty closely for a number of months so this wasn’t a surprise to me – it was more of a question of when than if.

In the beginning of August when I wrote my sheepdog post, I referenced having concerns that I wasn’t able to share about. When you’re too early to talk about something, people think you’re crazy or paranoid, and it’s not always a blessing that I tend to accurately anticipate things on the horizon before a lot of people. Actually, it’s quite challenging.

I’ve been waiting months for the mainstream media to write about this inflation issue so I can say something to you, so that you can take steps to prepare yourselves. Now that they’re finally writing about the price increases and the serious supply chain issues, they’re still doing their best to minimize it and keep people in the dark.

My understanding is that we are in an inflationary period, which – according to the theory that makes the most sense to me – will be followed by a deflationary period, and then a more rapid inflationary period. I don’t pretend to predict the future, I’m not an economist, I’m not giving you financial advice – I’m sharing my understanding of what the indicators seem to be. So obviously I could be completely wrong and if I am, no one will be happier than me.

Though back in June US Treasury Secretary Janet Yellen said that the inflation was “transitory“, it was pretty obvious to those of us paying attention that it wasn’t. I was disgusted then at the efforts to hide from the population what was happening, and I continue to be very concerned about being lied to and manipulated. Yes, strong terms and you’re welcome to think I’m exaggerating. I’d rather think I’m exaggerating. Looking at unpleasant facts isn’t fun. History will show retroactively what isn’t obvious to many right now.

This isn’t going to be a small blip on the economic scene, despite the media effort to minimize or explain away the issues. They don’t want a panic and they’re not telling you the truth about the severity of what is underway. They waited as long as they possibly could to even begin to mention the financial crisis developing, and are going to break it to you slowly, so you get used to the idea bit by bit.

I’ve lived on a budget for years and so do many of you. If we were to experience significant price increases in products, food, housing or energy (different parts of the world are seeing increases at different times), that would affect many people. Will that happen? It’s happening across the world right now.

Blessedly, Israel seems to be on the later side of the curve to be affected the the downward economic cycle. I pray we will continue to be minimally affected but the global economy is interconnected, and something major that affects one country inevitably affects the others.

Am I fear mongering, or telling you to panic? Absolutely not. I’m concerned, but I’m not panicking, and neither should you. Wherever you live, and whatever your income, there are things you can do to minimize the impact of increased living expenses on your family. But doing that means you’re going to have to be willing to consider some uncomfortable possibilities rather than hide your heads in the sand (which in the short term is really much more comforting).

One practical suggestion for right now: if there’s something you need or want that is of practical value to your family and you have the resources to purchase it, now’s a good time to buy it.

Going back to that cycle (inflation-deflation-rapid inflation), deflation is when prices fall because rising prices (inflation) have caused people to cut their extraneous spending. If we experience deflation, prices will go down on the things people can live without. (Yes, like toys!) However, it’s unlikely that prices on critical items go down.

The material costs are dramatically shooting up – metals, cardboard, plastics – and that impacts the price for you as the buyer. It also impacts what continues to be manufactured. As with my toy purchase above, some things will no longer be available because the company has decided it’s no longer profitable to make them.

The most important things you can do now are pray, and visualize our world stabilizing and healing. On the physical plane, I’m going to be talking more about frugality since taking responsibility for your personal economy is more important than ever.

Avivah

5 thoughts on “Talking about uncomfortable stuff – the economy

  1. Everything is going up. Real estate is crazy (I live in RBS – just 5 years ago, the average 4 room apartment was 1.6 million…now it is close to 3 million (or more)!
    My initial reaction is stress and wondering what will be and how will be manage? But I calm down after reminding myself that HaShem runs the world and ultimately parnassah comes from Him.
    We are a very spoiled generation. We are used to a lot of luxury which we do not view as luxury but rather an essential part of daily life. For examples, disposables, today in Israel increased to a whopping double the price!
    My mother never used disposables when I was a child and she had a bigger family and much more work to do. But I use tons of disposables every month and just thinking of life without disposables stresses me out and will probably add at least a 1/2 hour of work for me a day with dish washing, etc..
    But at the end of the day, if it’s not the budget, I can survive without disposables. It will be difficult. Everything is just a matter of getting used to.
    I think it is like this with most things. May HaShem always provide for us all.

    1. There’s a lot to respond to in your comment, Shani! I hardly know where to start.

      Your comments are so true, that Hashem runs the world and He takes care of us all. At the same time, there’s the balance of how much personal effort to put in.

      I really feel the stress about having one more task to do in an already full day. I’m thinking of sharing some dishwashing tips in a post in the next couple of days, for those in your situation who will be cutting back on disposables.

      About being a spoiled generation…I’ve often thanked G-d that I was born when and where I was. I have been very blessed to live at a time of no world wars, no famines, predictable lives of relative prosperity (compared to past generations). I know I’ve been blessed, we all have, and I hope that we continue to see ongoing prosperity for all. If things change, yes, people will get used to a new normal. Goodness, we’ve all gotten used to a new normal in the last 18 months! That’s what we humans have always done, adapt. However, I’m concerned about the emotional resilience of our current generation being much lower than it was a couple of generations ago, and I don’t think we would physically nor psychologically fare as well as they did if we faced challenging times.

      As I said in my post and remind myself every single day, prayer and emuna is the most important thing to focus on now. Hashem is bigger than all world events and controls those who look like they are in charge.

  2. In Los Angeles, if you look out from the beach you can see container ships, all the way to the horizon, waiting to be unloaded. (I’m sure your toy cars are out there, too!) The problem of supply and demand is not going away. Lack of availably and our dependence on Asian goods is not likely to decrease. Inflation is coming at us from every angle. The price of lumber has increased more than 20% in the last year. There goes housing prices. Frugality will become an art form and Avivah will be our Monet. I’ve learned so much to pass on from you! I do have to admit I love Yellen, though. I just wish she’d be a little more direct and give us more credit. We’re in for an economic roller coaster.

    1. Yes, I think there are about 100 container ships waiting at this point off the port there. I’ve heard various excuses why they are backing up (not enough truck drivers, not enough dock workers due to lower income people choosing not to work due to stimulus payments), none of which completely explain the situation. I’ve also heard that by the time containers are finally arriving, so much stuff is moldy that it has to be thrown away. So the cycle is escalating behind the scenes, and we’re only beginning to see the inflation. It really is coming from every angle, and so fast it’s hard to process.

      Unfortunately, we’ve all become way too dependent on Chinese manufacturing for cheap goods, and now we’re going to see the results of that. I’ve been keeping an eye on China and thinking about the consequences for all of us of their actions right now. (For example, they just told their citizens two days ago to stockpile food. And the government has been assiduously stockpiling massive amounts of food for quite some time. What do they know and what are they planning for?) It’s disturbing to me to consider that the leaders of communist China seem to be more direct with their citizens than ours are with us.

      About the lumber – when the prices went completely through the roof a few months ago, what we saw was that people stopped their discretionary building projects and then the prices went back down (deflation). (As a diyer, I took note of all this!) And now the prices are rising again. That’s impacted everyone working in the construction industry and though the housing prices have exploded in the US, I do believe we’re at the top and we’re about to see a major correction. The situation reminds me very, very much of 2006, when we finally bought a home (at the top), only to see the prices collapse a year later.

      The supply chain issues we’re seeing now are going to continue for at least another year, and since this is finally what the mainstream pundits are saying, probably longer. Forewarned is forearmed, however!

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