Wages rarely keep up with real inflation, although once in a while it keeps up with government-measured inflation. The upshot is that inflation, especially of the prices of essentials, is squeezing a lot of people. From Charles Hugh Smith at oftwominds.com:
There is very little wiggle-room left in many household budgets, and any decline in income will crack the ice.
A recent article on a well-worn topic–the rising costs of vehicle ownership–caught my attention. How the Costs of Car Ownership Add Up (New York Times). There’s nothing particularly new revealed in the piece, or particularly surprising for anyone who has 1) shopped for a new vehicle 2) shopped for a used vehicle 3) had their vehicle repaired or serviced recently 4) fueled up at a gas station or 5) paid auto insurance.
The most striking point was not explicitly said: these astounding increases in costs are putting many American households on very thin ice financially. There are plenty of statistics saying the same thing: a large percentage of Americans are living paycheck to paycheck and have less than $1,000 in a rainy-day / emergency fund, wage increases are lagging the soaring cost of living, and so on.
But statistics tend to be abstractions. Specific line-item increases on goods and services we all buy bring it home with a are you kidding me? 2X4 upside the head.
I have no idea if the five households surveyed are typical, but the costs of vehicle ownership in each case closely matches the AAA average annual cost of about $12,000 per vehicle.
I was also struck by the role dumb luck played in households’ vehicular fortunes. Those who happened to buy a new or used vehicle in the years leading up to 2020 are now hugging themselves in delight, especially if they were prescient enough to buy a modest-priced vehicle with high resale value due to the durability of the models–for example, a Toyota Corolla or Honda Civic.
Charles Hugh Smith is right in that a great many households are on thin ice, economically, but he ought to let the other shoe drop: This is being done deliberately, by the plutocrats and billionaires who run things. They’re following the old communist tactic of “grinding the middle class between the millstones of inflation and debt,” and the end-goal is a trap which is yet to be sprung:
Once the West as a whole is bankrupt, asset valuations will drop to pennies on the dollar, which is when the billionaires and central banks – and outfits like Blackrock – will swoop in and scoop it all up. Presto! They’ll own pretty much everything worth owning in society, with just crumbs from the table for the plebs and serfs.
The upshot then, is that warfare – economic and otherwise – is being waged upon ordinary people by many of those in power and the gigantic corporations and banks behind them.
We’ll see just how much respect for property rights we serfs will have after their inflation and debt grind our property rights to nothing.