Even more inflation on the way.

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Damage from the forced economic shutdown is being compounded by the trillions of deficit spending and lots of articles are suggesting there is more inflation on the horizon.

A few of the recent articles pointing toward higher prices in near future:

  • Supermarket billionaire expects 10% run up in food prices in near term
  • P&G raising prices.
  • Two big-time investors are seeing inflation now and expect more.
  • Pressure on car shortages may get worse due to lack of magnesium, which will drive prices higher.

Fox News – 10/18/21 – Food prices will go out “tremendously”: Billionaire supermarket owner– The president of Gristedes and D’Agostine Foods is guessing there will be something in the rate of 10% jump in food prices over the next two months. Rising prices and supply limits are working their way through the supply chain. He expects grocery stores will stop promotions and reduce the range of products they carry.

Wall Street Journal – 10/19/21 – Proctor & Gamble Uses Its capsize to Lesson Impact of Supply-Chain Mess – P&G announced it will start increasing prices of razors along with some beauty and oral care items. Previously they announced they would be increasing prices for diapers and toilet paper. Amount of increases was not announced.

One category of specific price increases they mentioned is transportation and raw materials. In July they predicted a $1.9 billion increase for the year. The new estimate is $2.1 billion increase the same timeframe.

To put that into perspective, let’s look at their quarterly sales of $20.3 billion. Annualized, the quarterly sales are $81.2 billion.

Three months ago they expected their costs for transportation and raw material to increase by 2.3% of revenue. Current estimate is a 2.6% increase in costs as a percentage of total revenue.

That is not good news for us consumers. They did not announce what the other costs are doing. They will absorb some portion of the price increases and find techniques to mitigate the rising costs.

However, their increased cost will soon show up as higher prices on the shelf.

Daily Wire – 10/18/21 “There Will Be A Crisis”: Legendary Page Fund Manager Wants That Economy Will “Hit The Wall” Do To Inflation – Carl Icahn is predicting a crisis because of the direction we’re going and the amount of money is being printed. His description that inflation will cause us to “hit the wall” on a long-term basis.

Another maker billionaire investor, the CEO of Apollo Global Management says inflation is in every part of his many businesses. He identifies problems with lead time, getting enough inventory, lack of supplies, lack of staff.

Jalopnik – 10/19/21 – The Car Shortage Is About To Get A Whole Lot Worse– Magnesium is a key component of the aluminum that goes into large number of components of modern cars. Amongst many other items body panels, fuel tanks, engine blocks, axles, and wheels all require aluminum.

Analyst reports the biggest magnesium producing town in China just ordered 35 of their 50 production operations to shut down, with the remaining 15 told to cut back by half. The reason is to conserve energy, which China has had a serious shortage of right now.

Everyone else probably house, but it’s news to me that magnesium oxidizes extremely fast once it’s out of the ground. That means you can’t stockpile it.

Production in Europe cannot keep up. Author expects magnesium supplies in Europe could run out in November.

Lack of magnesium could put a crimp in aluminum production, which could put a further cramp car production on top of the semiconductor shortage.

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