[...] Are You Prepared for the Mass Repricing of Goods and Services?

The answers to these and other related questions are being considered by management teams across all industries.  The simple fact is when the price of raw materials and labor inflate, it becomes very difficult to plan operations and production.  Hedging strategies may help manage for rapid, short-term price spikes, but they cannot ultimately prohibit a long-term repricing of materials.

In short, we believe a long-term repricing of materials, goods, and services, is now underway.  Certainly, prices will continue to rise and fall to meet supply and demand dynamics.  Yet this will take place in a range that is being repriced higher.  It has happened before and will happen again…

In 1960, for example, a gallon of gas cost $0.31 per gallon.  Similarly, in 1960 a gallon of milk cost $1.00 per gallon.  Currently, the average price of gas and the average price of milk are $3.28 per gallon and $3.68 per gallon, respectively.  That’s upwards of a 958 percent increase for gas and 268 percent increase for milk over the last 60 years.

Sure, the price of gas and milk could come down some from today’s prices.  However, there’s no way they’ll ever drop back to 1960’s prices.  They’ve been repriced higher for good.

Why?  Are gas and milk somehow more valuable today than they were 60 years ago?

We surmise these essentials have generally the same utility value they always have.  Yet the dollar has been greatly devalued.  Moreover, this great devaluation is the consequence of rampant dollar debasement policies executed in tandem between the Federal Reserve and Congress.

The recent debt ceiling histrionics in Congress – and the elevation of the debt limit for what we believe is the 79th time since 1960 – are merely another milestone in the great dollar debasement saga.

Remember, price inflation starts with expansion of the money supply.  These days the expansion of the money supply is conducted in tandem by the Federal Reserve and the Treasury.  In short, the Treasury sells new debt to the Federal Reserve, which the Fed buys using credit created out of thin air.

Congress, through its debt ceiling increases, provides the Treasury with an unlimited tab.  Congress then spends this limitless money into the economy via spending programs galore.  As this new money flows through the economy, prices adjust higher, as the supply of money increases much faster than the supply of goods.

The point is, through policies of mass dollar debasement, we’ve now entered the next stage of the mass repricing of goods and services in the economy.  The price of just about everything will adjust upward by several hundred percent – or much, much more – over the next decade.

Pre-pandemic prices are gone forever…

…and your savings, investments, retirement, purchasing power, and the quality of life that you’ve spent a life time planning and working for will be shredded.

Are you prepared? (read more)