August 26, 2022
I know we have been talking about the high prices and inflationary pressures over the past several months. High food and gas prices, all of it brought about by supply chain challenges that have crippled economies for their lack of sourcing goods.
What we have not spoken about is the possibility for a lingering stagflation that will cause a lot of us extraordinary pain and suffering.
The textbook definition of stagflation is the simultaneous appearance in an economy of slow growth, high unemployment, and rising prices. Do we not have that now?
The unemployment could be worse and could get worse. Do not for a second think that entrepreneurs have not begun to think about ways to not have this worker shortage as they’ve had as a result of this failure of their employees to return to work from the COVID-19 pandemic. Just as technology sent many workers home in the 1980’s from the US automobile industry, farmers, manufacturers down to your local McDonald’s restaurant will find a way to operate with little to no staff. We already see a bit of the future with self-checkout options in the grocery stores.
WE can see regular folks going into a fast food restaurant and picking their item of choice and a computer processes that and it is shot down to them in a hatch, sort of like a vending machine. Sure, better technology would or should help to reduce prices by lowering production costs, but what if it doesn’t? What if something else happens that disrupts that natural order of things? Don’t smirk, because it could happen- Who thought we would have COVID-19 and the world closed down except for the essential services?
Then what will we do when we have no jobs, no investment, but the price of goods remains high? We will have to suffer through it because the solutions to the problem have nothing to do with us but to do with humanity resetting itself from the years of trauma we have put it through.
My God, I thought the 2008 financial crisis was bad but this inflationary season can become the sum of all of our fears. We must get ready!