Since I really believe we are on the verge of close to hyper-inflation, it may be wise to warn you contractors and other businessmen about not getting your neck in a noose. Suppose you bid on building a home, taking into consideration the current price of lumber, bricks, pipe, wire, roofing, and even labor. Let’s suppose that it might take a couple of months to get your bid approved, and another 10 months to finish the house. With prices going up as they are, if you figured too closely, or even for that matter figured with some leeway, you might get stuck with a loss.
If you were Boeing, and were bidding on building planes several years in advance, how could you figure costs, if things keep going up in dollar prices?
If you are estimating anything, other than something which happens immediately, you’d better be careful.
Storing up food for a year, as the Mormons do, might not be a bad idea, considering how food prices have gone up over the last couple of months. Some say that food prices went up 35% in the previous 12 months. Everything has gone up. Wheat, gasoline, food, building products, and yes, even gold and silver also. Prices of gold and silver are sort of stuck in the area where they are, but they won’t remain there for long, I’ll guarantee you.
How can prices remain the same? Prices are pegged in dollars, and dollars are flying off the presses at a rate never equaled in history. Still, there aren’t enough to pay the interest and expenses. Medicare, welfare, Social Security, and food stamps alone, eat a tremendous amount of scrip, and thousands of baby-boomers are retiring every day and making claim on Social Security The glorious government is ’loaning’ the big banks billions every day, and using worthless mortgages as security. In other words, no security, but they loan to keep the whole thing from collapsing. It now costs $102,000,000 for a cup of tea in Zimbabwe. It costs a couple of bucks for a cup of coffee, and it used to cost a nickel when I was a kid. In my Dad’s drug store, where I grew up, we sold cigarettes for 13 cents a pack, and 2 for a quarter. Big Hershey bars were a nickel, as were Cokes. Inflation? Of course, and no one in history has ever been able to stop inflation without a collapse.
No, I am not saying the dollar will collapse. I am saying that prices in all currencies around the world will go up, because all currencies are being printed at the whim of their individual governments. The dollar prices will go up faster, because of our penchant for going to war and subsidizing everything in sight. Since inflation will continue into the foreseeable future in all currencies, and especially the buck, if you are bidding or estimating something for future production, you’d better figure on constant prices increases. It was just a few years ago that a quart of Quaker State was under a dollar, and now close to $5. On and on I can go and you can remember the same things as me. It might be nice to store up a few cans of vegetables and soup for future use, as in the future, they will cost more.