We’ve hit another SHTF news crescendo to warrant another post. Isn’t that a great word, “crescendo”? It just sounds nice . . . say it with me, c’mon. “Kri-shen-doh.” Aaaaaaah, it feels good . . . . anyway.
INFLATION!
Isn’t that a crappy word? Say it with me - “ugh”. The Labor Department released a new report yesterday stating that inflation at the wholesale level soared in January at the highest rate in 16 years! One percent in one month! Food, energy, and health care costs were the primary drivers. What does this mean for the Feds cutting interest rates? Difficult decisions must be made. Read:
The combination of rising inflation and weaker growth raises the threat of “stagflation,” the economic malady that plagued the country through the 1970s, when a series of oil shocks left households battered by the twin problems of stagnant growth and rising prices.
With the January jump, wholesale prices have risen over the past 12 months by 7.5 percent, the fastest increase since the fall of 1981, when the country was in a deep recession.
Food prices, which have been surging because of increased demand stemming from ethanol production, rose by 1.7 percent last month, the biggest monthly increase in three years. Prices for beef, bakery products and eggs were all up sharply.
Source is here. The more important question is: what does this mean for YOU! Death! Mayhem! Anarchy! Maybe not quite that bad, but it doesn’t look good. You (unless you’re rich) will feel the economic pinch even harder. Something will eventually have to give and the market will correct itself. The question is . . . when? The question is . . . how FAR must the economy sink before it comes out the other side?
Consumer confidence? That has plunged, too.
HOME SALES!
Woo-hoo! We road the real estate ride for too long, prices went stupid high, people kept buying, and shows called Flip this House were the norm leading everyone to think making money in real estate was easy, simple and brainless. Uh huh. Speaking of January reports, foreclosures jumped 57% compared to a year ago! What goes up, must come down. Read:
Nevada, California and Florida had the highest foreclosure rates in the nation. During the housing boom, all three states recorded big price run-ups, and saw a large proportion of homes sold to investors. In Nevada, one of every 167 homes was in some foreclosure stage last month.
California had the largest total number of foreclosures among the states. There were more than 57,000 foreclosure filings there in January, one for every 227 homes. Florida trailed well back in total foreclosures with 30,000, but its rate of one for every 273 households was only slightly behind its West Coast rival.
Several states recorded massive jumps in foreclosure activity in the last twelve months. In Rhode Island filings rose 279%; in Maryland they spiked 430%; and in Virginia they leapt 634%.
Source is here.
SERBIA!
We should all know by now that Kosovo has declared its independence much to the dismay of Serbia and Russia and that Serbian protestors smashed their way into the American embassy and set it ablaze. But did you catch the most recent Serbian news? They inked a gas pipeline deal with Russia to deliver natural gas to western Europe. Russia is on a move to position themselves so they can use their energy resources as political muscle. The divisions between Russia and its allies with the U.S. and western Europe are growing again. Does anyone else sense a second Cold War coming?
- Ranger Man
BTW: watch blonde Serbian women loot a clothing store in Belgrade during the U.S. embassy protest confusion and anarchy. They took chocolate, designer bags, shoes and clothes. Now they’re online stars!
5 responses so far ↓
1 Rushman // Feb 27, 2008 at 9:59 am
First, I want to start off by thanking you for all the work you put into this blog. Instead of painting the picture as the glass is half empty (or full) you simply put it as hey look that is a glass and that is how much water is in it so be careful.
Second, I agree the economy is in bad shape and I do wonder how everything will fair out. But we made it through the S&L scandals and Enron so I think somehow we will survive. I don’t think it is TEOTWAWKI, as so many do. But then again what the hell do I know?
2 Babs // Feb 27, 2008 at 12:25 pm
Hey Ranger,
Someone said recently “It’s gonna get a lot worse before it gets worse.” I don’t lean to TEOTWAWKI on this, but changes are happening, and it’s far from pretty. I’m in Cali, and between layoffs, foreclosures, inflation and the general mayhem life can be, I’m rethinking my urban survival strategies, too. Heck, I just put most of my worldly goods on Freecycle around midnight last night and had three people wanting a piece in less than two minutes. Had fifteen by the time I got up seven hours later. Imagine if I were giving away groceries instead of housewares and an old bed…
Be safe.
3 Dragon // Feb 27, 2008 at 12:40 pm
She is beautiful, Hell they both are.
They’ll probably keep about half the stuff,the rest will go on the black market.
and for the “Flop This House” folks ,I’m glad fer em. I know a deserving individual who has just lost his ass. Yee Haw!
I would care but when it counted ,he wouldn’t pay a livable wage. He has lost his house and four others and hasn’t paid anyone in 3 months. His wife filed for divorce last week and all of his vehicles have been repoed. Boy it sure sux to be him. I’m gonna go watch that video of the serbian blonde again. I think I’m in love…Dragon
4 Survivalistsam // Feb 27, 2008 at 4:00 pm
Man there goes the stereotype that all looters are men!!!!!!!!
5 Guy // Mar 2, 2008 at 8:37 pm
What I suspect we will see is a rise of civil disobedience begin in the poorer regions in the world and eventually reaching the western powers. This will be the result to two forces: The credit crunch, and declining strategic resoures (food and energy).
For a very long time, we experienced a huge expansion of credit that allow most people to live well beyond there means. Borrowing and spending help propel the economy into something completely unsustainable. Now that the credit bubble is poping, its having a double edge sword effect: less credit means people can’t use credit spend beyond their income, and now they must start paying off debt, which means even less disposable income. With reduced consumption comes reduced employment which further excerbates the problem.
On the resource side, we have declining availablity of food and energy resources. A severe worldwide drought is contrainting food production and higher energy costs means its more expensive to harvest, process, and transport food. Higher prices for basic resources will lead to much higher unemployment as consumers are forces to forkover even greater amounts of their income, just to put food, on the table, heat their homes, and get to work.
These problems won’t happen just here in the US and other western countries, but all over the world. The poorers countries will suffer first, since they are much closer to the tipping points. Is very likely that nation bording poor nations will experience destablizing forces, as millions of people are turned into refugees, looking for work, food, or just fleeing from chaos (riots, violent crime, loss of living conditions, etc).
We are now certainly heading into a recession, which will likely get progressively worse as unemployment rises and credit becomes even more difficult to obtain. I suspect, we will see significantly higher crime and drug abuse. Even if the TEOTWAWKI does happen, there are strong reasons to prep. About once every couple of weeks there is a major violent crime, such as a campus shooting, or a home invasion. These events make have been hundreds or thousands of miles away, but its just a matter of time before they arrive close to your home. What if you lose your job for an extended period ( a year or two). In that situation, you befacing your own personal SHTF.
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