What's Percolating Now May Cause The Next Storm - 2

We continue our discussion of what's percolating now that may cause the next "storm."  Our focus last time was the big build-up of debt going on, with an emphasis on the Federal Debt. We concluded with this:

For now, we simply note that just because the federal debt is out of control, we need to keep a lid on our personal debt. Same goes for businesses that use debt as a means to finance their money-making activity.

If we want to be good stewards, as we're called to be, debt cannot be allowed to get out of control.  

The Federal Debt isn't the only out-of-control dysfunctional activity perpetrated by the powers-that-be. While we don't have the time or space to lay out an exhaustive list here, one more we note is the credit-creation and outright money printing by the central banks of the world, especially the U.S. Federal Reserve. 

While most of can grasp the idea that the National Debt results from government spending more than it takes in, the Fed's shenanigans are a bit more complicated, even nuanced. Again, it would take a lot more than this simple post to delve into exactly how and why all this "creativity" springs from the great minds of the Fed Chairman and his minions. Just know they've distorted the economy and the financial markets to an extent never before seen. The situation can't continue indefinitely. 

Both the economy and the financial markets have been blown up into a bubble of historic proportions. Bubbles eventually deflate at best, burst at worst. Can-kicking only goes so far. Eventually, consequences manifest themselves - and they're not pleasant. Inflation is perhaps the most noticeable at this time. But that's not the only consequence we'll have to deal with - albeit one that's bad enough.

Just as hurricanes result from specific identifiable weather phenomena, so too will the storms we've spoken of result from the items we've identified - and more. As for how these impact us...

We've already felt the impact of inflation. On a personal level, we're paying more for the consumer products we need and/or want - with the "needs" being more important than the "wants." Needs (food, clothing, shelter) are harder to cut back on vs. "wants" (fancy vacations, new cars, bling, etc.).

Businesses must adjust to higher cost of materials, raising prices for their goods. But there's a limit to how much prices can be raised. Too much and folks stop buying.

For professional practices, vendors charge more for their products and services. Clients squeezed by inflation can only absorb the higher fees needed to pay vendors for their services. 

It's a cycle that, once started, is difficult to stop. And we've just scratched the surface. Plus, inflation is just getting started. It's not going away anytime soon.

Frankly, we have far too little control over the government and the Fed. As a result, we're being hit hard by their arguably irresponsible, dysfunctional and, yes, immoral policies and actions. There's not much we can do at this point.

On the other hand, we all can control our personal decision-making. This applies to our individual and family finances. Specifically these include all our decisions regarding spending and consumption. 

For example, if we're in the habit of leasing a fancy new car every three years, can we continue this if prices of everything continue to rise vs. our income? 

We all should be good stewards of our material possessions at all times. If we haven't been particularly good stewards in the past, now's the time to start. If we've already been reasonably good stewards, there's always room for improvement.

Final comments and recommendations:

What's percolating may soon cause of storm. If not in the fall, then some time after. Months or years later? Likely more months than years.

While their percolating continues unabated, we'll need to get our own personal kettle percolating. Our personal percolator will include: physical, mental, emotional and spiritual discipline. Whichever of these has been weakest, start pumping up. There's no time to lose here.

Getting ourselves in tip-top shape won't prevent the storm from hitting us. It will, however, allow us to absorb the shock and respond to any financial power outages, falling trees, and baseball-sized hail.

Well, looking back over the last two days, we bit off a bit more than we could chew here. But our purpose was not an exhaustive analysis, but rather increasing awareness via a brief intro to the forces that are, for many of us, percolating beneath the surface - out of sight, out of mind. 

But whether we're aware of these, or try to keep tabs on them, the percolating continues unabated. That's really the best lesson here. Like the weather patterns that ultimately launch hurricanes, these have been and will be ongoing.

Be aware.