Peak Inflation, “Shmeak” Inflation

Peak Inflation, Shmeak Inflation
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Hope you weren’t listening to all the “experts” who were calling for “peak inflation” last month.

Today, the US Bureau of Labor Statistics (BLS) released its Consumer Price Index (CPI) report for the month of May 2022.

I guess making the money machine go “brrrrr” has some consequences after all.

Those who were calling for peak inflation to have occurred in April, perhaps doing so more out of hope than expectation, are now having to retune their faulty prediction machines after May’s CPI came in at the highest level in 40 years.

Checking in at 8.6% year-over-year, May’s report saw a whopping 10.1% increase in food alone, something we’ve all become far too accustomed to over the course of the past year or so.

The good news is, the supply chain is still functioning at a level to get food on the store shelves, although whether or not there will be future shocks and disruptions, and to what extent, remains to be seen.

For instance, we have yet to see the store-shelf impacts of disruptions to normal rice production that have taken place this year.

In the United States, the top producer of rice in Northern California’s Sacramento Valley recently reported that due to a massive reduction in water supply being allocated by the state government, the Sacramento Valley will fallow 370,000 of 450,000 acres in the Sacramento River Settlement Contractors service area.

We are already seeing disruptions to wheat production and exports around the world. An increased inability to export wheat out of Ukraine due to the war with Russia, lack of availability or in some cases difficulty in trading with Russia due to imposed sanctions, and now India imposing a total ban on its own wheat exports, shrinking the the available market from which wheat-hungry nations may import, who knows what wheat availability and prices will look like in the near future.

Once again, though, there is still good news.

That good news is that there is still time for you, your family, and loved ones to prepare.

There is still rice on the store shelves. There are still loaves of bread on the store shelves. And, if you are one to bake your own bread (if not it might be a good time to either learn how or buy a breadmaker) there are still sacks of flour on the store shelves.

How much longer there will be and at what prices is anybody’s guess, but the ability to prepare is still on the table.


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