It’s been a tough year for bacon lovers. As shown in the Consumer Price Index (CPI) November 10 summary, bacon and numerous other consumer items have skyrocketed in price over the past year.
Unless you’ve been living off the grid in 2021, you’ve likely already noticed and been affected by the rising prices for many items, including bacon. So, what should you do? What should you buy now in case future prices render your favorite products unattainable? Referencing recent reports and statistics, we’ll share tips regarding items and stocks you may want to purchase or invest in sooner rather than later due to rapid inflation.3
Also, if you’re confused as to what hyperinflation is, what causes it, and how it would affect our society, you’ll want to read our blog explaining hyperinflation and then come back here for preparation tips!
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How Quickly Are Prices Increasing?
Americans recently experienced the greatest surge in consumer prices since November of 1990. The last time prices climbed this quickly in the United States was during a severe economic recession, resulting from the Savings and Loan Crisis and a surge in inflation during the late 80s and 90s.
According to the CPI November 10 summary, the average price of consumer items increased by 6.2% from October 2020 to October 2021.A The CPI reflected higher prices on virtually everything from everyday grocery items to fuel and used cars.
So, which items have increased the most in price? And, which increases will affect you the most?
We’ve compiled a list of some of the most popular consumer products and services that have rapidly increased in price and included them below.
How Much Have Prices Increased in One Year? (October 2020 – October 2021)
Food & Common Consumer Items
- Bacon +20.2%
- Steak +24.2%
- Eggs +11.6%
- Fresh fish and seafood +11%
- Baby food +7.9%
- Peanut butter +6%
- Infant and toddler apparel +7.6%
- Men’s suits, sportcoats, and outerwear +9.3%
- Women’s dresses +9.2%
- Televisions +10.4%
- Sporting goods +8.7%
Furniture & Appliances
- Laundry equipment +14.9%
- Living room, kitchen, and dining room furniture +13.1%
- Bedroom furniture +11.8%
Energy
- Gasoline (all types) +49.6%
- Propane, kerosene, and firewood +34.7%
- Utility (piped) gas service +28.1%
Transportation
- Used cars and trucks +26.4%
- Car and truck rental +39.1%
- New cars and trucks +9.9%
Travel
- Lodging away from home (hotels and motels) +25.5%
All price percentage increases mentioned above are from the CPI November 10 (2021) summary.
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What to Buy Before Hyperinflation Hits
Before we get into this list, we want to remind you that while preparation is critical, we do not recommend hoarding items. We can all recall the toilet paper shortage of 2020, and if possible, we would prefer not to repeat that tragedy.
Food
From October 2020 to October 2021, food at home and away from home increased by an average of 5.3%, according to the November 10 CPI report. The index for meats, poultry, fish, and eggs saw the most considerable increase with a whopping 11.9 percent, including price increases of 21.1% for beef and a 14.1% increase for pork.
And meat isn’t the only food category taking a hit. Peanut butter, margarine, milk, apples, and other fresh fruit have gotten noticeably more expensive.
With that in mind, what foods should you consider buying now?
Canned Food
If prices continue to rise for meat products, it may be beneficial for you to stock up on cheaper alternatives to fresh meat. If canned chicken or tuna increases in price, it will likely remain more affordable than fresh meat. Also, for even more inexpensive alternatives, you can purchase beans and other canned foods, including certain varieties of soups that have a longer shelf-life.
Soup has only experienced a 3.2 percent increase over the last year, so it may be wise to stock up on some soups now, especially because you won’t have to worry about them spoiling in your pantry in the coming months.
Frozen Vegetables
Unless you’re a carnivore, it would probably help to include vegetables in your diet. If you have a garden full of fresh vegetables or know someone who does, then you’ll want to take advantage of this. However, if fresh veggies at your grocery store are outside of your budget, then you can always purchase frozen vegetables.
While canned vegetables prices have increased by more than 6% in the last year, frozen vegetables have gone down in price. And, if you’re concerned about nutrients and minerals in frozen foods, a 2017 study found that there were no significant differences in vitamin content between frozen and fresh vegetables.B
Fresh and Frozen Meat
If you would have a difficult time relying on alternative sources of protein, the good news is that frozen foods stored continuously at 0°F or below can be kept indefinitely.C However, even if these foods remain safe to eat, you’ll want to note that the food’s quality or taste may be significantly affected over an extended period in a frozen state. But if you have a large freezer or even a deep freezer, it’s good to know that this is an option should you opt to purchase large quantities of fresh and frozen meat now and store them in case their prices continue to rise.
White Rice
Wait a minute—hasn’t the price of rice gone up? Yes, rice prices are still high compared to how much it cost before the pandemic, but they are lower than the peak months of the COVID-19 lockdowns.D Rice is still relatively cheap compared to other popular sources of carbohydrates and is a great food to have ready in a pinch.
While brown rice is generally known for containing more fiber and nutrients than white rice, it has a shorter shelf life. Uncooked, dry white rice sitting in your pantry at room temperature has a shelf life of up to two years. You can extend this even further by refrigerating or freezing your rice.
White rice is also calorie-dense and reasonably easy to cook/prepare.
Energy
Of all item categories that have gone up in price, energy led the pack by a landslide. Gasoline in October of 2021 cost 49.5% more than October of 2020, and fuel oil increased by 59.1 percent. The combination of high demand and low availability have resulted in higher prices at the gas pump and for powering homes.
Propane, charcoal, batteries, and Alternative Energy
As much as prices have increased for fuel, many believe that prices will not go down anytime soon. With that in mind, it may be in your best interest to stock up on energy sources such as propane and charcoal, mainly if you frequently use a grill for cooking. Even though these have already significantly increased in price, there’s no telling just how high these prices will climb. However, if you have an alternative means and can avoid purchasing these altogether or at least until costs reduce, that would be ideal.
Depending on what’s feasible for your household and location, it may be best to have a wide range of energy options available should circumstances worsen. Along with fuel, you could buy extra batteries and even solar power equipment if you have the means.
Alternative Transportation to Gas-Powered Vehicles
Along with gasoline, new and used cars have experienced tremendous increases in price. As a result, now would be a great time to consider alternative transportation to driving your gas-powered vehicle.
For example, if you have a short commute to work or reside in a location where you could easily bike or even walk, then you could save a pretty penny by entertaining these options. If you don’t own a bicycle or another alternative to driving your vehicle, it may be worth purchasing one, but without breaking the bank, of course!
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Are Investments Worth the Risk Right Now?
The drastic change in demand can present unique opportunities for investors, as we’ve seen with the massive influx of cryptocurrency investors. Assessing risk and consumer behavior during high inflation and nationwide shortages are critical first steps to wisely invest during this time.
Many investors believe that a diversified portfolio is key during a financial crisis. According to a recent article from Forbes, it is recommended to rebalance your investment portfolio with slight adjustments rather than a complete overhaul.E Focusing on tangible assets such as those within the real estate sector and pursuing value stocks versus growth stocks can be reasonable investment strategies during high inflation. For bonds, many investors recommend sticking with Treasury Inflation-Protected Securities (TIPS) bonds, which adjust the bond’s principal value based on inflation.
Should You Invest in Gold and Silver During Hyperinflation?
Gold and silver are widely viewed by many as a good hedge against inflation, stock volatility, and other market risks. “Rich Dad Poor Dad” author Robert Kiyosaki has been one of the biggest proponents of this strategy. He has been accused of hoarding gold, silver, and bitcoin in the expectation of a bargain bonanza should a market crash occur.F So, should you follow his lead?
Like all investments, gold and silver can fluctuate in price. Gold has been relatively stagnant in the past year, while other assets like cryptocurrencies have greatly appreciated. Gold’s recent underperformance has been linked to several developments, including central bank activities, potential interest rate changes, and of course, rapid inflation.G Also, silver is 50% below all-time highs. Kiyosaki sees both as low-risk, high-potential investment opportunities.
Investing in gold and silver could be a step towards diversifying your investment portfolio. And if you have the means and the financial security to invest in these precious metals, then it could be worth your while.
This blog is not intended to provide any tax, legal, financial planning, insurance, accounting, investment, or any other kind of professional advice or services. To make sure that any information or suggestions in this blog fit your particular circumstances, you should consult with an appropriate tax or legal professional before taking action based on any suggestions or information that we provide.
Sources
A. https://www.bls.gov/news.release/pdf/cpi.pdf
B. https://www.sciencedirect.com/science/article/abs/pii/S0889157517300418
C. https://www.foodsafety.gov/food-safety-charts/cold-food-storage-charts
D. https://www.arkansasonline.com/news/2021/aug/21/global-rice-prices-spike-during-pandemic-despite/
G. https://money.usnews.com/investing/investing-101/articles/should-you-invest-in-gold
