(The Economic Collapse Blog)—Do you believe the politicians in Washington or do you believe your own eyes? The politicians keep telling us that “inflation is low”, but everyone can see that everything sure does cost a lot more than it once did. Our standard of living just keeps going down, and even JPMorgan Chase CEO Jamie Dimon is admitting that “inflation is hurting people”. But how can inflation be “hurting people” if it is under control? Of course the truth is that it isn’t under control. If the official rate of inflation was still measured using the formula that was in place in 1980, it would be well into double digit territory right now. Prices have been rising much faster than paychecks have, and that is putting an extraordinary amount of financial stress on the more than 60 percent of U.S. adults that currently live paycheck to paycheck.
Vox is a website that leans very far to the left, and even they are complaining about inflation.
In fact, a recent article posted on Vox boldly declared that life in 2023 “means being in a constant state of sticker shock”…
Life in 2023 means being in a constant state of sticker shock.
You walk out of the grocery store feeling like you’re not really sure what happened, but somehow, your normal fare ran you $50 more than you swear it should have. Did Diet Coke always cost that much? Or eggs? Maybe you’ve been putting off buying that new car in the hope prices go back to where they were pre-pandemic, but you’re starting to feel like the wait is awfully long. Or, the morning after a post-work happy hour, you’re left scratching your head. You swear you had two glasses of wine, but the size of your credit card receipt makes you wonder if it wasn’t four. “How expensive everything is today” is a top theme of conversation. The whole situation can be infuriating.
I don’t care for Vox much, but those two paragraphs are quite accurate.
Prices have reached absurd heights, and most of us really are “in a constant state of sticker shock” these days.
And the cold, hard numbers back this up.
According to a report from Republican members of the U.S. Senate Joint Economic Committee, the typical household in this country “must spend an additional $11,434 annually” in order to have the same standard of living that it did when Joe Biden entered the White House…
The typical American household must spend an additional $11,434 annually just to maintain the same standard of living they enjoyed in January of 2021, right before inflation soared to 40-year highs, according to a recent analysis of government data.
So let me ask you a question.
Has your household income gone up by $11,434 a year since January 2021?
If you are like most Americans, your income has barely moved.
As I discussed last week, half of all American workers made less than $40,847.18 last year.
If you are one of those workers, life is not easy in 2023.
Even really basic things just cost so much at this point. For example, a Big Mac value meal will now set you back 18 dollars in some parts of the country…
A Big Mac burger, a medium beverage, and a medium fry meal now costs 18 dollars in some locations, up $10 from 2018 when former President Donald Trump was president.
Visiting McDonald’s has become something that only wealthy people can afford to do on a regular basis.
Of course it isn’t just fast food that has become painfully expensive…
- A pound of ground beef now costs $5.23 on average, up from $3.89 in January 2020.
- Coffee is up some $2 a pound. Prices for fresh fruits and vegetables are nearly 14% higher.
- At one point, the price of a carton of eggs was triple its pre-pandemic price.
When I was growing up, my mother would feed us ground beef all the time.
Now it is considered to be a luxury item.
Let me give you another example of how inflation is killing us financially.
The cost of auto insurance and the cost of home insurance are both going through the roof…
The skyrocketing cost of auto and home insurance is increasingly weighing on cash-strapped Americans.
In 2022, the average price of both types of insurance saw its biggest spike in more than five years.
And this year rates are projected to grow by an even greater amount, according to analysis from S&P Global Market Intelligence. Within the first seven months, both had already jumped by double-digit amounts.
When you combine both expenses, the average American household is now spending over $3,700 a year…
According to the latest analysis from Forbes Advisor, the average cost of home insurance is $1,582 a year for a policy with $350,000 coverage. And typical motorist pays $2,150 a year for full coverage car insurance.
That means on car and home insurance alone a household can expect to spend more than $3,700 a year.
How can anyone afford that?
And don’t get me started on health insurance.
Our system is so broken that only those with lots of money can afford a decent health insurance policy that actually has adequate coverage.
Needless to say, Joe Biden doesn’t want to take the blame for any of this. Last week, he was accusing large corporations of “price gouging”…
President Joe Biden delivered remarks from the White House on Monday to announce the new council’s creation. He touted the lower inflation rate and falling grocery prices but admonished American companies for, in his view, not going far enough.
“Let me be clear: To any corporation that has not brought their prices back down—even as inflation has come down, even as supply chains have been rebuilt—it’s time to stop the price gouging,” Biden warned, imploring them to “giv[e] the American consumer a break.”
Seriously? Other liberals are actually blaming you for inflation…
People hate inflation, just not enough to spend less: This is one of the central tensions of today’s economy, in which things are going great yet everyone is miserable. And in some ways, Americans have nobody to blame but themselves.
No matter how high prices go, most of us still have to pay the bills and put food on the table.
So there is only so much that we can “cut back” on our spending.
However, one recent survey did find that approximately a quarter of the U.S. population has been engaged in “doom spending”…
Nearly all Americans, 96%, are concerned about the current state of the economy, according to a recent report by Intuit Credit Karma.
Still, more than a quarter are “doom spending,” or spending money despite economic and geopolitical concerns, the report found.
A lot of people figure that if everything is about to fall apart they may as well enjoy things while they still can.
But I think that a much wiser approach would be to use the resources that you have to get prepared for the tremendous chaos that is ahead of us.
Economic conditions are going to get a whole lot rougher from here.
So enjoy these relatively stable times while you still can, because they will not last indefinitely…
Michael’s new book entitled “Chaos” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
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Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.