This might be somewhat preaching to the choir, but it’s the only way I know to help Treepers prepare their families according to very visible economic signals happening just over the horizon. Back in August, when we discussed the massive inflation that was climbing straight up, I warned everyone to look behind the finished good prices, into the prices of origination and intermediate goods. {Go Deep}
The “producer price index” is essentially the tracking of wholesale prices at three stages: Origination (commodity), Intermediate and Final. The final product inflation rate in July (reported in August) was alarming at 7.8%. However, we warned of much higher flowing into the supply chain.
Today, The Bureau of Labor and Statistics (BLS) released stunning price data for October [DATA Here], showing a dramatic 8.6% price increase in Final Demand products at the wholesale level. As expected prices are still going up, and there’s no end in sight, because the raw material inflation is still higher than current.
[BLS] “The Producer Price Index for final demand increased 0.6 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.5 percent in September and 0.7 percent in August. (See table A.) On an unadjusted basis, the final demand index rose 8.6 percent for the 12 months ended in October.” (more)
I modified Table A (final demand product pricing) taking out some of the noise to make it a little easier to see the big picture of what is happening.
When you see the wholesale level of prices almost double the increase in consumer level inflation rate, you can predict that consumer prices will likely go even higher. Future finished goods at a retail level will carry the current wholesale price increase.
Stuff costs a lot now… and because the inbound stuff to make the finished goods is still climbing in price…. stuff is about to cost even more. You can see this in the inflation rate of intermediate goods which I have highlighted below.
You can see from Table A that finished good prices are still climbing. That’s the higher price inflation you are feeling when you buy a product.
More alarming is to look at the “intermediate demand” products [Table B below] as they flow through the manufacturing system. Two types of products are at the intermediate wholesale level: Processed Goods, and Unprocessed goods.
I have again modified Table B to remove the noise. Notice two key aspects:
(1) Prices for both types of products are still climbing in the manufacturing process. Compare August, Sept., and Oct., noticing how the prices are still climbing. Some of that has to do with energy and fuel costs still climbing. The increasing prices for gasoline build into each part of the transportation process.
(2) Notice the scale of the increase in the prices from prior months. The trend line is not leveling off, instead it’s doing the opposite. The rate of inflationary climb (price increase), at the intermediate level of goods coming into the system, is getting even more steep. The stuff coming into the manufacturing process is not only costing more, it is costing much more than before.
The wholesale prices of products into the system that end up at the retail level is still through the roof. In a major way, this is being driven by massive increases in energy costs throughout the entire supply chain.
This is going to get even uglier. Even if wages jumped in price 5% overnight (single month), which would be a large increase in wages, those wage increases are nowhere near enough to deal with this level of price increase at a consumer level. A nickel more per dollar earned is futile against a loaf of bread costing $1 more, or gasoline at $4.00/gal.
Do what you can do now to start preparing your weekly budget in ways you may not have thought about before. Shop sales, use coupons, look for discounts and products that can be reformulated into multiple meals or multiple uses. Shelf-stable food products that can be muti-purposed with proteins is a good start.
Consider purchasing the raw materials for cleaning products and reformulate them yourself to avoid these massive increases in petroleum costs. Most working families use laundry detergent, and that cost is going through the roof with no signs of slowing down.
♦ EXAMPLE – Several years ago, a dear friend showed us a method for making laundry detergent at home along with a bucket. After using this for several weeks (and then making it) I was stunned at how simple, cost-effective, and good it works. Not only does it save big $$, but it works better than, or at least as good as, Tide or any other high-priced name brand product for literally pennies on the dollar.
What You’ll Need: {check your local store’s laundry aisle}
- 1/2 Cup: Arm & Hammer Super Washing Soda {not Baking Soda}
- 1/2 Cup: Borax {you might be able to print a coupon here}
- 1/3 Bar of Fels-Naptha Soap {Mark the bar in thirds before using}
- Bucket {3 gallon size }
- Empty laundry detergent containers or bucket with lid to store detergent.
How to make:
Use small cheese grater to grate 1/3 bar of Fels-Naptha Soap over large pot or saucepan…
- Add 6 cups of water.
- Heat over medium-high until soap dissolves and melts.
- Add 1/2 cup Washing Soda & 1/2 cup Borax, and stir until dissolved.
- Remove from heat and set aside.
- Pour 4 cups hot water into bucket, then add Soap Mixture.
- Stir well, then add 1 Gallon + 6 Cups of additional water. Stir.
- Transfer to a bucket with a lid, or pour into empty laundry detergent containers.
- Set aside, and let it sit overnight, or up to 24 hours, to thicken and gel up. It will likely turn into a gel overnight.
- Consistency and color will vary depending on your soap & water ~ it may be lumpy and watery ~ kind of like a watery gel, but it works great!
- Stir or shake before each use, as it will continue to gel.
How Much Will it Cost?
- Borax, 76 oz. box ~ $2.98
- Arm & Hammer Washing Soda, 55 oz. box ~ $2.99
- Fels-Naptha Bar of Soap ~ $1.79
- Total Cost to make around 2 gallons: About $1.00!!
- This amount filled up my large empty extra-large Tide container from Costco and a smaller Purex container!
This recipe makes a low-sudsing detergent, and remember, it will turn to a liquid/gel after it settles, so you will need to shake the container before use. You can also pour it into a spray bottle to use as a pre-spot treatment. The 3 ingredients will make at least 3 batches and will last a long time.
I would not present this idea if it did not work exceptionally well, this was one of the most useful tricks I learned to stretch a budget that really does save money and work even better than high-priced laundry detergents. The home made detergent even removes hard soils and red clay stains from clothing remarkably well.
We are all in this together!
The Road to Socialism in one Big Spending Bill starts next week:
Here’s what’s in and out of Democrats’ big social-spending plan — for now. There are more “hidden” spending items not reported.
https://www.marketwatch.com/story/heres-whats-in-democrats-big-social-spending-bill-for-now-11634564753?reflink=mw_share_twitter
Rule # 1: Democrats don’t do anything without a plan and an angle to exploit. They are better at politics and Republicans. It is their lifeblood.
THE DEMOCRAT PLAN IS TO MAKE THE ECONOMY ARTIFICIALLY AWFUL.
Think about it. So much of what the government s doing appears to be insanely inept… but these people really aren’t dumb. They’re just corrupt and evil.
In the wake of all these horrible policies, decisions, etc. the media has [amazingly] started to turn on Biden with some gentle critiques, and certainly pop-culture (lets go brandon, SNL etc) has already turned on Biden. The whispers of pants-pooping, confusion, dementia, and more are becoming louder, and aren’t as aggressively suppressed. The polls coming out now went from Mr 81 Million Votes to the least popular president in recorded history. Here’s the thing: Dems have ALWAYS wanted Biden out. They always wanted Kamala (Hillary’s money lined up behind her, AND Obama’s people lined up behind her… she is the perfect empty, brown communist vessel).
After the midterms Biden is gone. This gives Kamala the chance at 2 years + 2 full terms (10 years).
Now think on to step 2:
What better way to give Kamala a ‘bounce’ than by artificially suppressing the economy NOW with absolutely laughably terrible decisions, then after she gets into office — PRESTO — she reverses much of this and the economy (without insane artificial constraints) rebounds in time for the 2024 election.
Kamala will likely win, given those circumstances. Especially if the GOP nominee is Trump.
ps – Borax (and home made detergent) is great. As a bonus you can get a giant box of Oxi powder from Costco for relatively cheap. Toss a bit in, and it’s worked great. This even worked in hard water areas we’ve lived, which is saying something.
It is not artificially awful. It is legitimately awful. And they don’t care about elections – they care about power. This is to advance their power.
Well, that may seem like a simple logical progression that these scum bags may dream about/hope for,… but it’s not gonna play out that way. ..
Why do you think that horrible woman would beat Trump?
Easy ways to deal with inflation:
If the price of something goes up 20%, buy 20% less. Assume a car gets 25 mpg and you pump approx. 9 gal at each fill-up; at $4/gal, a fill-up will cost you $36. Now gas goes to $5/gal, your fill-up will cost $45, but instead of pumping 9-gal., you pump 20% less, or 9 x .080 = 7.2 gal. At $4/gal, a 9-gal. fill allows you to drive 225 miles; at 5$/gal., the same fill will get you 180 miles, or 35 miles less. If you fill-up once a week, all you have to do is find a way to drive 35 fewer miles, that’s only 5 miles per day.
Under this scenario, $4/gal. gas allows you to drive 225 mi./wk, or about 32 mi./dy. For most, that would be a typical round trip to and from work; but since you work only five days a week, (5 dy. x 32 mi./dy. = 160 mi) you’ll have 65 driving miles left to cover shopping and other trips. If you shop locally and consolidate your trips, 65 miles should be plenty of margin.
What if the price of gas doubles to $8/gal! You will pump 50% less (9 gal. x 0.50 = 4.5 gal); this allows you to drive only 112.5 miles on a single $36 fill-up, far short of the 160 mi./wk. needed just to get to work. If you still need to drive a total of 225 mi./wk., the difference will have to be made up somewhere else.
I eat out 7 days a week for $16/meal (includes taxes & tips), part of that price includes $1.79 for coffee. I really don’t need that coffee but it goes well with the food. What if I did away with the coffee and replaced it with hot water, sugar and some lemon (usually free)? That’s a savings of $1.90 (with tax) per day, $13.3 / wk., or about $53 per month. That’s an extra gallon of gas per week or an extra $53 I could apply towards my heating bill. And what have I really sacrificed? Frankly, virtually nothing of any consequence.
For simplicity, let’s assume my restaurant visits are on the way home from work with no extra miles to account for.
What if I ate out just four days a week instead of seven? First off, we have to adjust the savings to take into account a slight uptick in the grocery bill since were now eating at home; the $16/dy. savings is probably closer to $12/dy. if you’re trying to replicate that same exact restaurant meal. Never the less, that’s still a savings of at least $36 / wk., or an additional 4 gallons of gas per week plus the extra gallon we could buy just from doing away with coffee. An extra 5 gallons of gas per week allows us to drive an extra 125 mi. per week with $8 gas — 112 +125 = 237 mi, enough to get us to and from work without spending any more at the pump.
And what was the great sacrifice that allowed me to do this? Going without $1.90 coffees and eating out four days a week instead of seven. Truth be told, the meals I’d be “forced” to fix at home probably contain half the calories as the restaurant food.
While this is good for me, it sucks for the restaurant, there will be a significant loss in sales if everyone starts doing this (and they will). Especially hurt will be all the nice ladies who wait on me, I tip generously. A major loss of traffic means lost tips, reduced hours and possibly lost jobs. They have to pay $8/gal gas just like everyone else, and it’s gonna hurt them far worse than it will me. This is not a zero sum game, the people at the bottom of the economic ladder are going to suffer the most.
Is this a serious statement?
why would you be so snarky? It is actually good advice and he’s right about it hurting the bottom of the economic ladder most. Everyone will be buying less. The nice ladies will still get his tips, but 20% less every time. You can turn off lights, carpool, ride your bike, etc. Just about everyone could eat 20% less and skip the Starbucks. If you put some thought into it, you could save a significant amount of the increase.
I read an article from an irate restaurant owner once about someone who came in for hot water, sugar and lemon every day. The customer brought her own tea bags. She broke down all of the costs to her restaurant associated with the cup of hot water. Reminded me of your tip. I’m sure your well-tipped waiters would be happy to bring you a cup of water!
Once you make the detergent, how much of it do you use in an ordinary wash? I didn’t see that in your article.
about 3/4 to 1 cup for medium/large load.
Use exactly as you would your normal detergents. Note one thing – you might need to add an extra rinse cycle. Homemade detergents are great, and work almost effectively as the big name brands. The only thing they lack is ingredients that assist with rinseability. Worst case, your clothes might be a little stiff, especially if you have an HD washing machine.
Inflation is too much money chasing too few goods. The FED is pumping.
I am an executive in the detergent chemical industry that supplies all of the major pharmaceutical companies, and am in charge of pricing and purchasing of large quantities of raw materials – both commodities, and surfactants, which are the main ingredients in detergents. Here is a brief overview of the situation.
Commodities, such as sodium bicarbonate (baking soda), sodium carbonate (soda ash), and other basic additives that adjust pH, thickness, anti-redeposition, rinseability, and other properties are up around 10-15% on a raw material cost basis from February. Not a single material is unaffected.
Citric acid is up nearly 40-50% when it can be found, at minimum. There is a nationwide allocation, which means that they give material to whom they feel like. One of the major domestic manufacturers of these materials shut down production of citric acids and other acidulants due to maintenance. Many companies in my industry are paying nearly 300% (not a typo – three hundred percent) increases on citric acid.
Domestic primary surfactants, which are made by a handful of companies such as Stepan Company, Solvay, Huntsman, and many more, are up 15-20%, due mainly to oil cost, transportation, etc.
Domestic specialty surfactants, specifically of a class called ethoxylated surfactants, are nearly gone. Not hard to get, not difficult to find – gone. In February, the ice storm took out piping and power lines along the entire gulf coast. The two towns that got hit hardest were Houston, TX, and a little town called St. Charles, LA. St. Charles is where all ethoxylation takes place in the USA for everyone from Dow to Sasol to BASF, and is the key process to make these specialty ethoxylated surfactants. Then, after 4 months of shutdowns, just when everything was getting back into swing, Hurricane Ida wrecked everything all over again.
Dow, one of the largest companies in the world, only restarted production at their facility there in early October.
The crisis of transportation and at the ports is only adding to this crisis of manufacturing in the chemical industry. News to everyone? It was never covered, not even once, on the news.
If truckers are going to be forced to be vaccinated come January, there will be even less trucks than there are now.
The wheels of the world are being purposefully and deliberately ground to a halt. We’d be better off with the mafia back in control of the ports worldwide.
This is going to get so much worse before it gets any better, and the administration in office is doing everything in their power to make sure it is as bad as possible.
It is so interesting to hear from those that have real world experience and share it on CTH. Thanks for the inside knowledge.
It’s LAKE Charles, pop. 70K. The area is also a terminus for export of large volumes of domestic LNG overseas.
Remember, Donald Trump is also a strategic thinker, and this time he knows the enemy. There are also two giant economic changes coming that will throw a huge monkey wrench into the works: crypto currency and a block chain based equity market. Both put economic power back on Main Street.
Not being snarky: how so?
Lets face reality…shall we…We are being ruled by a cult of people who “Worship money” and have removed God from every aspect of life. Therefore you have to deduce that the Bible is 100% correct when it states..
“When the Wicked rule, the people suffer”
I would guess Bidens approval rating is more like 8.6 %