Inflation

[1Admin]

"Marsha! Marsha! Marsha!" ;) LOL

Seems like all we hear about is inflation. The "threat" of inflation. "Real" inflation. Food inflation, etc.

Now obviously the bogus and ALWAYS used official 4% inflation rate is neither official nor the actual inflation rate... LOL

So.... if we are in for an extended period of high inflation (I would argue it's already started to a small extent), how do we prepare for that?

What do YOU see coming from it?

The classic "Howard Ruff" approach is that you shouldn't bother yourself worrying about debt because you can "pay it off with inflated dollars."

I don't buy that.

I think what we are seeing and will likely continue to see is inflation on the items people HAVE to have. For example- gas, food and electricity being the biggest three that come to mind.

It will squeeze the middle class and poor. Dude that makes $300K a year isn't going to be greatly bothered by his $400. a month grocery bill going to $600. a month.

For the rest of us, that will be an issue. Ditto with gas.

So.... how do you see the inflation thing playing out over the next couple years. How do you prepare for it, etc.

Let's hear some new angles on this.

Robert

[slingshot]

One, just one, counter measure would be to start growing some food. Garden plots if you have the space, pots if you don't have the space. Seems like people stopped gardening at the worst possible juncture in history, when the population began to explode.

As far as gasoline, I did the only thing I knew how to do, bought a little high mileage car (Corolla) for every day use. I only use the 2 trucks (3/4 ton) on the place when I absolutely have to. I use my ATV when I can on the place, fixing fence, checking cows, cutting wood, etc., even in the winter and hot summer. In the good old days I rode around taking care of things in the comfort (heater & AC) of the 4wd 3/4 ton truck year around. Not now. Those days have gone with the wind. Now I only use the trucks to haul cattle, bring in wood, put out hay, etc.

As far as electricity, I'm stumped. Everything I've looked at, solar or wind, is so expensive that it is a false economy to go that route. Dollarwise, I'd have to live to be 120 years old to save any money from not using the grid, and they can't produce the amperage I need anyway. So, I just have 2 gensets as backup to the grid. With 2 freezers, household appliances, shop with welders, air compressors, etc., I'm stuck on the grid. I'd love to hear some practical suggestions on how to remedy the grid problem, and still maintain the capability that I need for this place.

[Klayton]

Good question slingshot!!

I for one am psyched about alternate energy, but if you saw my other threads and comments, I have hit dead ends also.

The contractor that tried to sell me the $30K+ solar system claimed it would run everything we currently have and get some coin back through net metering. He also claimed a payback in 7 years. But not according to my calculator.

My downside (actually my wife's) is the love of full house central air, and a HUGE LCD TV for her soap operas...
I actually think I could survive on enough power for a few hours of light at night, and enough to keep 2 deep freezes fully functional.

When I eventually get my new BOL, it will have gas powered stove/oven, woodstoves, and the use of a strategic trombe wall or two. For back up, plenty of cast iron skillets and pots, and a wood burning pizza oven.

[slingshot]

I tried to plan ahead when I built this place. I have propane cook stove, water heater, and wall heaters in the bathrooms. That saved our rear ends during an eleven-day outage in cold weather (ice storm.) I have a full basement that we can move to, either summer or winter, if we loose power long enough and I run out of gas for the gensets. The outdoor wood furnace preheats the water for the propane hot water heater for the house. My gens can carry everything but the central AC, welders. I run the well pump by itself, just to be safe. It's too important to take chances with. In the summer dog days we would move to the basement. Same in the winter. The basement always maintains good camping weather year around.

I'm thinking about getting a small solar array to recharge batteries and similar small stuff. Every outage situation I've ever been in, I really enjoyed the local radio show commentaries, and I want to keep that capability. I guess I'll just have to forget about the shop and central AC during a prolonged outage. That's ok, we can handle it. Just hope nothing breaks that needs welding. I'm no expert, but it seems like solar is only good for the small stuff, and I'm not sure what a solar system's life expectancy is.

Electricity is sure addictive!

[Klayton]

slingshot did you check out the PAW videos on solar? these guys know a LOT more than me, and I think one of their videos the guy mentions a solar panel can last 20+ years, but I may have that confused with another youtube video I have watched,,,

[610Alpha]

I have to agree with you 1Admin, we will notice the commodity prices first and foremost then we will see a gradual increase in secondary items because of the increase in the primary items, which I think begins the trickle down affect to all the other categories. Obviously supply and demand can fluctuate but its the core products that start the overall inflation wave. Milk has gone up $0.10 in the past week or so, that is a 2.85% increase. Have cows gone up in price? Have the machines increased in price? I doubt it but the fuel to transport and the electricity to produce the milk have. I bet the farmers cost to produce and harvest that gallon have not really gone up that much, maybe a little bit in electricity on his farm but overall not that much. But as you take that milk from the source and move it to the store the cost creeps up because of the fuel that is used to move it.

[Klayton]

How can you say in one sentence the fuel price has gone up but the next sentence say the farmers price hasn't gone up that much?

Have you ever seen how much fuel is used in farm tractors to sow seed, then cut it, then rake it (sometimes twice depending on the weather), then bale it, then haul it back to your hay barn? Everytime time fuel prices goes up, its the farmers that get hit the hardest. Because on their side, they cannot demand higher prices for their raw milk. They just soak it up, and yet there are still people who demand to stop farm subsidies. To all them, I say I hope the farmers say screw you and stop producing corn. It will only take one year and America will collapse. No corn, no plastic! No corn, no corn oil! No corn, increased price for all methanol (most common additive to lower fuel cost)!

Americans keep bashing farmers, but they really have never done it, or know the domino effect that would happen if they stopped subsidizing farmers. There was a movie made by some college students some time back, "King of Corn" I believe. Where they show the costs to produce just one acre of corn. They end by showing all the products that rely on corn production, and how it is IMPOSSIBLE for farmers to produce, without subsidies...

[610Alpha]

How can you say in one sentence the fuel price has gone up but the next sentence say the farmers price hasn't gone up that much?

I'll attempt to clarify what I was saying.

In the aspect of actually producing the milk. I grew up on a farm, grandfather was a farmer, step father and most of his family are farmers. If the dairy farmer lets his cattle pasture graze then it doesn't cost that much for the grass to grow. I went to high school with a girl and her family had a dairy farm, we watched the whole milking process from beginning to end. The farmer let the cows in from pasture, they were milked (electricity), then they were let out. The milk is kept refrigerated (electricity) until the truck comes and pumps it out of the holding tanks. The rest of the processing of the milk is done somewhere else. In this context it doesn't cost the farmer that much, besides the initial investmet yaddy yaddy, I am focusing on the actual production of a gallon of milk without focus on the whole start up cost. Granted when winter comes around he will have to feed the cattle and that is where some cost goes up, but spread out over the year and all those gallons it quickly becomes pretty small. My father-in-law used to bail his own hay for his horses but has since stopped due to it being just easier for him to buy the hay from someone else and have them store it for him, at a price point that is hard to beat when one considers the labor involved etc..

Yes planting hay, which I have bailed and stacked, corn, and all other manner of crops requires some fuel to plant and harvest (bailed a couple of acres and not once did we have to fuel up not a large tractor either maybe 5 - 6 gallon capacity). With "No Till" seeds this reduces the amount of field work. I have always believed that the farmer has gotten the shaft on what they get paid for the crops they produce.

A farm can be ran debt free and make a profit, yes its weird and hard to find but it can be done. Some of those farmers need to not try and keep up with the Jonses too. Believe me I have some farmer friends that like their toys way too much and are in debt up to their eyeballs.

[Klayton]

That's awesome. My grandfather had one of those small dairy farms too. :)

My uncle's current dairy farm has over 200 head, no need to refrigerate, milk truck comes almost every day for pick up... :)

He only pastures 25% of his holsteins at a time, the rest are fed in the feed lot. Where we mulch up a round bale, and drive the tractor down the trough line and the hay is dispensed into the trough as we drive. :)

It is controlled insanity is what I tell my uncle. I mean he is working the herd almost from sun up to sun down every day, 7 days a week.
That's too much nonstop work for me. LOL

[Klayton]

Oh, and I know what you mean about keeping up with the Jones'. Everytime I go visit my dad and uncle I am amazed at the number of farmers driving Cadillacs in town. Mud up and down the sides near the tires, but they got their Caddy. LOL

[610Alpha]

That's a whole lot of milk. Tell your Uncle thanks for being a farmer!! It is one of those thankless jobs, long hours, and lots of hard work. My Step Dad worked 3rd at the Coal Mine and farmed during the day. I don't think the man had more than 5 hours sleep in 35 years. Explains why his coffee was so strong :)

Father in law and I have talked about raising feeder calves but both of us are too busy right now. Would be easier if I lived in the country like he does.

[slingshot]

slingshot did you check out the PAW videos on solar? these guys know a LOT more than me, and I think one of their videos the guy mentions a solar panel can last 20+ years, but I may have that confused with another youtube video I have watched,,,

Klayton, no, I haven't seen those. I'll try to find them. Thanks.

[protus]

Klayton, no, I haven't seen those. I'll try to find them. Thanks.

survival report has the solar movies on his channel. A very good series on set up, and description of systems. One of the few REAL "survivalist" solar films out there( real solar,,not 10 harbor frieght panels jooked to a 400watt car invertor and a trolling motor deep cell junk)

[slingshot]

Hey, thanks protus! I've got that downloading now. That's a heckuva site. It's going to take me a awhile to work through all of his stuff. Thanks again!

[Bull]

I think of solar and the rest more to be self sufficient, rather than saving a lot. I'm sure there are ways you could save but you definitely have to make the initial investment. I think of it more to have so that if the grid fails, you still have some of what you need. As far as dealing with inflation, I think you can just buy a whole lot of everything you use and eat now, store it, and continue the process. This will at least, to some small degree, put off the affects of inflation. You are going to deal with it every time you replenish your stock, but you at least get your initial stock now, before the price goes up. Repeat as needed until you can't afford it any longer, then live off your supply. Also, invest in precious metals: Gold, Silver, Brass and Lead. Re-evaluate your priorities. Do you need a phone that gets internet, for that extra $20 or $30 a month? Do you need all those channels on the tube? Start cutting back now so you can afford food, gas, and electric. Also, if you are thinking about investing in stuff to make your house more energy efficient, it will be cheaper now, than when inflation affects the price even more. Simple things like using foam, insulation, weatherproofing to seal your house better might help. I haven't priced it, and I'm about to do this when I get home( will post result) but you could probably build solar water heaters for relatively cheap, so you use less electricity for heating your water. There are probably a lot of little things you could do to cut your bills without too large an investment. Don't forget what our ruler, B.O. said: inflate your tires and save a little on gas. This winter I'm going to read about our corrupt, overbearing, politicians and their disastrous, tyrannical, all intrusive government policies as much as possible, in order to cut down on the heating bill and still stay warm. I think simple this to be more energy efficient, and frugal living is going to be the key for the average Joe. I just don't know enough about how to deal with inflation from an investment or savings standpoint, other than investing in commodities and metals. I think the best thing is to put twice the pressure we have been on the politicians to do a 180, and get away from these disastrous policies, or we're going to be screwed no matter what.