We're not all in this together

A lot of businesses won't survive what's coming and I believe that's by design. Those who read my weekly blog posts might remember that I warned them last year to prepare for raging inflation when all the "experts" we're telling them it was "covid" or "transitory"; now they're saying it's Putin's fault and to prepare for food shortages.

Last week the Senate blocked a bipartisan bill which would have given $48 Billion in stimulus to small businesses. By blocking that funding the government stimulus programs through the SBA are now out of money. No more PPP or EIDL to help small businesses cope with the mountain of policy-inflicted damages they've sustained for over two years. Small business owners can take comfort however because the Senate DID approve sending another $40 Billion tax dollars to Ukraine the very same day!!

"The bill would have provided $40 billion to a relief fund for struggling restaurants. Democrats provided $28.6 billion to the fund in their COVID-19 relief package, but the federal dollars quickly ran out, with only one out of three applicants receiving aid."

The marketplace right now has demand but that demand isn't being fulfilled efficiently because of raging price increases and supply chain issues. The results are catastrophic for some businesses like the wine producer I spoke with last week with pallets full of bottles to fill existing orders and no bottle caps.

There are some things you just have to have, you can't ship products that are only 99.9% finished.

Despite the problems most of us are facing now there is apparently is an increase in positive expectations for future business prospects as expressed by the "Small Business Optimism Index". According to the NFIB the biggest concern for business owners (32% of those surveyed) is price inflation.

"Inflation continues to be a problem for small businesses with 32% of small business owners reporting it’s their single most important problem in operating their business, the highest reading since the fourth quarter of 1980."

Here is what I think is happening and where it will lead us over the next few months:

I feel pretty certain that there will be a major disruption in supplies of most critical items including food. We're already seeing baby formula disappear but what most news outlets are ignoring is far more important: Diesel Exhaust Fluid - without it we don't have trucks trucking and the economy locks up.

"Pilot Flying J runs hundreds of truck stops in 44 states; they report annual fuel sales around seven billion gallons, and they make, distribute, and sell hundreds of millions of gallons a year of diesel exhaust fluid, a product most truckers must use to drive their trucks. Look around your house: You’re surrounded by stuff that you got because truck drivers fueled up at a Pilot or Flying J truck stop, or at ten of them. And here we have the person who runs the company warning that he’s struggling — increasingly — to get fuel and DEF to market. He’s warning about rail lines embargoing product, and the strong possibility of trucking being sharply throttled in the very near term."

My suggestion is to make preparations for shortages now. There is demand for finished products and services (still) so if you can use your capital to take down extra inventory or make needed hires do so sooner than later.

"Remember this moment. Remember, in six months, that we were here, and that the news was about Amber Heard which is apparently very important."

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