Fuel here in town was $3.79/gal for the E85 stuff today. That’s the garbage that is watered down with corn. The real fuel was $4. Diesel was $4.89.
I know that is cheaper than what most of the country pays, we refine, transport, and produce so much fuel, we get it from the tap. It is twice what we paid a year ago here in Oklahoma.
I think the prices scale for the rest of the country. Everyone is paying double what they paid a year ago. According to ValuePenguin the average household was spending $250/month on fuel. Now it’s double that at $500.
Groceries are way up too. According to the Bureau of Labor Statistics (those liars), ground beef is up 16% for the year ending February 2022. A quick search shows that Sam’s club was charging $2.66/pound in May of 2019. It’s $3.84 today. That’s a 44% increase in around 30 months. Prices on most foodstuffs are going up, up, up.
But the increases are just getting started.
Row-crop farmers are finding nitrogen has tripled since last planting season and phosphorus and potash have doubled. We’ve already mentioned diesel has doubled. Many of these farmers are electing to plant less of their ground because they can’t afford to plant it all. All of them are getting slammed with the higher priced inputs.
Many are predicting household monthly food costs may increase by $1,000 by the end of this year. Motley Fool says the average household was spending about $610/month on food at the end of last year.
Fuel Prices have already doubled. Groceries are on their way apparently.
IF the grocery prices go up by $1,000, (I think they will) AND fuel prices have ALREADY gone up by $250/month/household, household discretionary income will have to make up the difference.
Apparently, half of US citizens have a monthly discretionary income of $250 or less. According to Motley Fool the average household monthly discretionary income is $1,729.
The fuel increase alone has gobbled up every spare dollar for half of US citizens already. Grocery price increases will gobble up more. These folks will have to start making choices. Dis-saving. Living on depreciation. Wearing stuff out. Patching up. Making do. Maybe getting skinny.
As price pressure increases more and more people will be faced with these problems and choices, while the folks who are out of discretionary income now will start missing installment payments, missing rent payments, etc.
There is a very good chance that the entire discretionary monthly income of the United States will be consumed at the grocery store and the gas station in the near future. We’ll be hitting the wall. For many they will have to make up the difference by devouring their assets.
We are going to see:
- House foreclosures
- Car repos
- ZERO vacation travel
- Optional monthly subscriptions, WRECKED. OGB, Netflix, Whatever. Those come out of the budget first.
- Deferred maintenance. Bald tires, bad roofs, etc.
- No retirement saving
- Fewer calories available
People are going to have to make hard choices. They are going to have to make the kind of choices that my grandparents were used to making. Stretching the meatloaf with rolled oats, saving the ratted out jeans to cut patches from for the better jeans at one extreme, who gets to eat tonight at the other.
How do you think the modern US citizen will respond to this?
Whatcha gonna do about it?