The economic downturn that followed COVID-19 is far from over. Price inflation has brought the cost of living to all-time highs, and many survival essentials — including food and fuel — are getting too expensive to stockpile.
This guide to inflation in 2023 and 2024 will help you improve your financial security and prepare for more economic troubles ahead.
>How Did We Get Here?
Inflation — an increase in the price of goods and services — occurs when the economy develops a handful of flaws. Factors such as excess demand, rising wages, raw material costs and new government spending policies force companies to raise their prices so they can break even. Inflation can come in several forms:
– Demand-pull inflation: Upward pressure on prices following a supply shortage
– Cost-push inflation: Forced increase in prices following an increase in production costs, including raw materials and wages
– Built-in inflation: Workers demand higher wages in response to rising cost of living
The United States is currently experiencing a combination of all three inflation types. The COVID-19 pandemic started with a major shortage of fuel, timber, pharmaceuticals and other essentials due to trade restrictions. Once they were lifted, a sudden influx of materials caused production costs to increase, making inflation worse.
Average workers — at least the ones who didn’t resign — had to demand higher wages to afford their homes, vehicles and other expenses. Many employers obliged, but increased salaries have contributed to worsening inflation. Growing geopolitical tensions have also restricted international trade, keeping the global economy in a state of limbo.
All these problems came to a head in the summer of 2022 when inflation peaked at 9.06% and prices for food and oil got out of control. These high-value commodities suffer the greatest price increases from inflation. They’re always in demand, so even a moderate increase in production costs or wages can cause costs to balloon.
Although the worst has passed, the United States’ consumer price index (CPI) rose by 3.7% from September 2022 to September 2023. Food prices saw the biggest increase, while energy prices dropped by 0.5%. Worries about the inflation rate have caused global stock activity to flatline in the last few months as people are hesitant to invest.
What Can You Expect Next?
Based on historical data and market projections, you can expect inflation in the U.S. to get back down to 2.3% by the end of 2024. This number doesn’t reach the Fed’s goal of 2%, but it’s a step in the right direction. Global inflation is expected to fall from 6.6% to 4.3% in 2024, which is another promising prediction.
However, the worst-case scenario is still on the table. Inflation could skyrocket to double-digits like it did during the great Energy Crisis Recession in 1981-82. That recession was partly triggered by the Iraq Revolution, which caused a major global oil supply disruption and sharply increased prices.
There could be a similar situation in 2024 and beyond as conflicts in the Middle East continue to disrupt the oil trade. Over the last 10 years, lubricant prices have increased twice a year on average and only decreased twice. If production instability continues, another energy crisis could come in the latter half of the 2020s.
Managing Inflation as a Survivalist
From a survival perspective, the answer to the inflation crisis is the same as ever — self-sufficiency. Now is not a good time to be dependent on economic growth. You must diversify your investments, prioritizing tangible assets with real purchasing power. One thing in particular comes to mind — precious metals.
Even during a recession, gold, silver and jewels retain most of their value because of their rarity. As paper currency declines in value, metals and gems will hedge against that devaluation. They’re also easily portable and liquidable, which means you can relocate in a SHTF scenario with all your assets and convert them into cash for survival supplies if necessary.
In addition to investing in precious metals, you must also diversify your income. People who live on homesteads have a distinct advantage over city dwellers because they can create dozens of income streams through crops, livestock, hunting and homemade items. You can develop new survival skills and make more money simultaneously.
Economic conditions are improving, but you should continue stockpiling food, fuel and supplies. The only adjustment you might have to make is getting more fuel than usual. Prices are finally returning to below $3 per gallon in some states, but they might spike again. Take advantage of the lower prices and get cheap gas while it’s available.
All these efforts will combine to make your family more self-sufficient and prepared for an economic depression. Inflation has improved from 2022 and projections look promising for 2024, but nothing is guaranteed in this unstable geopolitical climate.
Prepare for the Worst, as Always
The economy has experienced a rough stretch of inflation since COVID-19 went global in early 2020. Inflation peaked in the summer of 2022 and has slowly decreased in 2023, but the cost of living is still uncomfortably high.
We’re not out of the woods yet. As always, survivalists should prepare for the worst and keep stockpiling food, fuel, precious metals and other essentials to weather the storm.
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