Just In Time Whiplash

Is @taskmaster4450 the only one who can see it?

Inflation is not a problem.
We are about to get absolutely ravaged by deflation.
The GREATEST DEPRESSION is coming.
And it is not going to be pretty.

In the above linked post Task talks about many of the reasons why deflation is the real threat right now. Inflation is not a forward-looking indicator. If we want to know what's going to happen in the future, talking about prices going up in the last 6 months is not at all helpful.

Many people wrongfully assume that the inflation debate is a relevant one to focus on. As I and Taskmaster know... these higher prices we are seeing are completely and utterly unsustainable. There comes a point where citizens simply can't afford the higher prices. This makes inventory increase. More supply makes prices lower. Lower prices means workers get laid off and/or paid less. The economy will contract. All of these issues point to one devastating outcome: DEFLATION.

Essential vs non-Essential

Some products are essential, and some are not. Examples of essential products are food, water, shelter, power, gasoline, medical care and medication. Examples of non-essential products are new phones, clothes, computers, gasoline, alcohol, furniture, art, appliances, etc. Notice how gasoline is listed as both essential and non-essential. This is where things get tricky. Many non-essential items become essential within certain contexts, and vice-versa.

Everything is relative.

There's a big difference between using gas to go to work and using it to joyride around town. Also, there are many essential product that get wasted and overused because they are abundant and cheap. See what happens when everyone has to penny-pinch to get by. Even though food is essential that doesn't mean that citizens can afford to continue buying the same products they were a year ago after losing their job. That hardship trickles down into all other purchases that person makes. There are many many variables to consider here.

JUST IN TIME business model.

This is the main topic of discussion I wanted to bring up that many are not even factoring into the equation. Supply-lines have been hit hard by things like COVID policy and sanctions against Russia. Corporations have been scrambling for years now trying to keep up with the changing environment of the global economy. Evolution is happening in real time, and evolution is ugly and surrounded by failure/death.

Everyone was using the Just In Time business model to eek out some more profits. During the pandemic, we saw that this greedy (but efficient) model was the cause of many supply shocks to the system. It stands to reason that many businesses out there are going to try to avoid this happening again at all costs. This kind of fishtailing whiplash could be just as damaging in the opposite direction.

If businesses are all of a sudden stepping out of their comfort zone and stockpiling product that they wouldn't normally stockpile, what happens when those products don't get consumed? When combined with all the other topics being discussed, this makes deflation even worse.

Conclusion

Inflation is an irrelevant indicator that shows us what's happened in the past. The real threat to the economy has always and will always be a deflationary death-spiral. Prices going up temporarily while the supply-lines are shocked shouldn't even be considered inflation, as inflation is an irreversible expansion of the money supply, not a temporary deflation of essential/non-essential products.

Nearly everyone in the world is ignorant to these factors and variables when it comes to the global economy. Everyone would rather just complain about the price of gas going up rather than actually try to understand these issues. When the majority is ignorant, the minority can capitalize on that ignorance.

We can reasonably assume that everyone is going to complain about "inflation" being a problem. We can also assume the FED, in their infinite wisdom, will continue choking the economy with increased interest rates during perhaps the worst possible time to do so.

Now is not a good time to be bullish on anything except for the value of USD. If everyone is complaining about inflation and the value of the dollar going down... yep, that's when you bet against the market and make sure you have a balanced position going forward. The Dollar is strong and it will become even stronger with increased rate hikes. For me personally it's all about having as much BTC, HIVE, and USD as possible. It's time to consolidate into the secure communities that we actually believe in rather than going all in on some random new project. I will not be caught off balance again. Greed and desperation are punished in crypto, and I've learned that the hard way a dozen times now. Stay grizzled.

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