Food Shortages Punching the Populace in the Gut

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by David Haggith

With CPI hitting a 40-year high today, as economists anticipated it would, inflation has shown us it is going to keep getting worse. People in some areas of the nation are already alarmed about food shortages. Prices are rising as shelves go empty. So are tempers.

“This morning’s CPI read really only solidifies what we already know: Consumer wallets are feeling pricing pressures and in turn the Fed has signaled a more hawkish approach. But the question remains if the Fed will pick up the pace given inflation is seemingly here to stay, at least in the medium-term,’”said Mike Loewengart, managing director for investment strategy at E-Trade. “With Covid cases continuing to rise, the impact on the supply chain and labor shortages could persist, which only fuels higher prices….”

A shortage of workers has led to clogged supply chains and empty store shelves. Though there are signs the omicron variant cases could peak soon, lingering Covid issues combined with cold weather in the Northeast point ‘to renewed upward pressure on food prices,’ wrote Paul Ashworth, chief U.S. economist at Capital Economics.

Food prices broadly rose 0.5% for December and were up 6.3% on a 12-month basis, the biggest rise since October 2008. ( )

Inflation rises 7% over the past year, highest since 1982

In fact, food prices look like they will take a big leap up in January, as this becomes the first month in which eye-popping shortages have started to show up in some parts of the country because of an exploding worker shortage due to the Biden Mandates kicking in at the same time Omicron is putting all kinds of people out on sick leave for a couple of weeks.

That has become literally a one-two punch to the gut as it has added to the supply shortage in grocery stores that had only begun to appear in December. The occasional empty shelves in December could have been mostly due to holiday shopping and holiday meals back, so I didn’t write anything about it to avoid being alarmist, but it is clearly not that now, especially in groceries:

It’s like a soviet store during 1981. It’s horrible.

I think we’re about to have a food shortage.

Very little meat, and whatever meat is in there is super-high priced … extreme little produce. It’s kinda scary.

All of a sudden things disappearing…. You need to do something about it…. They need to hurry up and get it straightened up because people gonna be starvin’. They gonna be starvin’ out here…. It’s gonna get rough here.

With people starting to panic, as you see in the video in those areas where suddenly it is difficult to get food nearly citywide, prices can only be restrained by price-gouging laws; but stores are already saying they have to raise prices as a way to ration the goods that are fleeing out the door. It takes a huge raise in prices to keep people from buying all they need to eat. Think about how much extra you would pay if not paying it means you don’t replenish the kitchen for the next couple of weeks.

Some are ready for this — perhaps even because of recommendations I gave months ago for building up stores of non-perishable goods that you normally buy. Even those stores can run out quickly. I know I’ve followed my own advise of buying twice as much of everything we get and storing half away with each purchase for the last couple of month, but it won’t take long to blow through that. Still, if you took the warning, you have a cushion if these shortages hit where you live. (So far, I have not seen them where I live.)

See also  Truckers Warn Canada To Get Ready For Crisis Shortages and Inflation

If the situation spreads, as seems likely, given the huge labor crisis that Biden has worsened considerably, January will see a lot of upward pressure on food prices. That situation can grow rapidly into extreme panic because it is happening in cities like Washington, D.C., where in just another week’s time millions of people could be clawing to get food that is not replenishing itself on shelves if something doesn’t turn the labor crisis around immediately. Fortunately, many of us have a little fat to burn, but we don’t like burning it.

You could easily wind up seeing the government having to use the National Guard (again, just as it started doing last month in hospitals) to move food into major cities quickly enough. Because grocery stores blow through a lot of merchandise rapidly, you could see a huge worsening of this into a crisis in just a week or two.

That is exactly the kind of environment I’m talking about where, if things go bad for the stock or bond markets during the Fed’s taper, the Fed will have NO room to retreat from its taper because of all the political pressure over soaring inflation at a level that is literally punching the populace in the gut.

Trending hashtag where people are posting their own photos of empty store shelves in their area. You can, too: #EmptyShelvesBiden.

 

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