The “American Dream” is not as affordable as it once was. In fact, tens of millions of Americans are having a really difficult time even affording the basics these days. As you will see below, an increasing number of people are turning to credit cards and high interest short-term loans just to pay for essentials such as food. Thanks to a very long series of exceedingly foolish decisions by our leaders, we are now facing a historic inflation crisis. As a result, the cost of living has been absolutely soaring in recent months. Of course the vast majority of Americans have not also seen their incomes soar, and so our collective standard of living has been steadily diminishing. Unfortunately, this crisis isn’t going to be over any time soon, and so that means that American families are going to be squeezed tighter and tighter as we head into 2023.
When you are barely scraping by from month to month, it can be really tempting to turn to credit cards for relief.
And that is precisely what has been taking place.
This week, we learned that credit card debt surged at the fastest pace in 20 years during the second quarter of this year…
The Federal Reserve Bank of New York reported that credit card debt held by U.S. households surged by 13% on an annualized basis in the second quarter, representing the sharpest climb in over 20 years. A recent study by Wells Fargo found that Americans also rely on credit card rewards to offset everyday expenses.
“When it comes to credit card spending over the past couple of years, we have seen categories shift on where people are spending their money and right now our top categories are grocery and gas,” said Krista Phillips, Wells Fargo executive vice president and head of branded cards and markets.
It is a really bad idea to pile up credit card debt just as the U.S. economy is entering a major downturn.
But most people are not interested in such warnings.
High interest “buy now pay later” loans are even worse, but their popularity is absolutely exploding right now…
But when credit cards are maxed out, some consumers go to BNPL loans as a way to bridge the gap, according to a Harvard study from earlier this year showing that the industry is booming with a particular draw to consumers earning less than $50,000 annually and those with sub-prime credit scores.
According to the New York Times, “buy now pay later” transactions are triple what they were just two years ago, and food purchases are an area of “significant growth” for the industry…
The New York Times reported that $45.9 billion in BNPL transactions were made in the U.S. last year, which is a three-fold increase from 2020. While food only accounted for 6% of those purchases in 2021, stats provided by the companies indicate significant growth in that arena.
When economic conditions turn really sour, those that have gotten deep into this type of debt will be really sorry.
But I can understand why they are doing it.
All of us have to feed our families, and a single cart of food can now cost as much as a really cheap used vehicle did in the old days.
Earlier today, I came across an article on Zero Hedge that really caught my attention…
However, in actuality, inflation and the budgetary issues it is causing in U.S. households, is resulting in “infighting” amongst families, according to the Wall Street Journal.
35 year old Leibel Sternbach, a financial adviser, told the Journal: “If I buy more of my milk before the one in the fridge is empty, there’s going to be hell to pay.” He said his wife double checks the fridge after every shopping trip and tells him of all the things he didn’t need to buy.
The couple spends about $350 per week in groceries – a bill that is up from $220 a year prior. They are cutting back on items like pre-cut vegetables and oven ready meals to try and cut additional costs from their bill.
Millions of other Americans are having similar discussions in their own households.
In the old days, I can remember paying 25 dollars for everything that I needed at the grocery store for an entire week.
And that even included an entire cake.
These days, an entire shopping cart full of food will run you hundreds of dollars.
For years, economic pundits such as Peter Schiff and myself have been warning that nightmarish inflation would be coming.
Now it is here, and Schiff insists that what the Federal Reserve is doing to fight inflation is “not going to work”…
“I don’t know why everybody continues to be surprised when the inflation numbers come out worse than expected. They assume that what the Fed is doing is going to work. It’s not going to work. The people who think it is don’t understand the nature of the problem.”
Schiff believes that in order to defeat inflation we are going to need to see interest rates hiked until they are “higher than the CPI”…
The numbers indicate that Fed can’t win this inflation fight. Part of the solution is positive real interest rates. If you look at all of the Fed tightening cycles since 1973, the central bank has never stopped tightening before the Fed funds rate was higher than the CPI.
If the Fed really did hike interest rates to 8 or 9 percent, that would plunge us into an extremely bitter economic depression.
But that wouldn’t totally solve the inflation crisis either.
There are two fundamental factors that make this crisis different from any other crisis we have faced.
First of all, there is simply way too much money floating around. Our politicians borrowed and spent trillions of dollars that we did not have over the past few years, and the Federal Reserve pumped trillions of dollars that it created out of thin air into the financial system.
Hiking interest rates cannot erase all of that money. Secondly, rising prices are not just being caused by changes in demand.
We have a major global supply problem now, and I believe that it will only get worse in the years ahead.
So the Fed can try to crush demand as much as it wants, but that won’t alter our supply issues.
That will be particularly true for categories that have relatively inelastic demand such as food.
No matter how high interest rates go, people will still need to buy food for their families.
But as global food shortages grow more severe in 2023 and beyond, the total supply of food available is just going to get tighter and tighter.
As a result, I believe that food prices will continue to go up no matter how high the Federal Reserve hikes interest rates.
And every month that prices rise faster than our paychecks do, our standard of living goes down.
This has been happening for quite some time now, and our leaders in Washington should take full responsibility for this.
***It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.***
About the Author: My name is Michael and my brand new book entitled “7 Year Apocalypse” is now available on Amazon.com. In addition to my new book I have written five other books that are available on Amazon.com including “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, “Get Prepared Now”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending digital copies as gifts through Amazon to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible.
I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.
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Article cross-posted from End of the American Dream.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
