In early December I told you a "buzz saw" was about to hit your purchasing power. Right now we're all experiencing the tip of the blade because the same catalysts that have led to today's environment of relentless price increases are getting worse.
To wit, the US-Canadian border through which most of the goods are transported has been blockaded by truckers holding human rights demonstrations against medical mandates resulting in major car manufacturers having to close factories or work skeleton crews due to lack of parts.
"The disruptions we are seeing at the US-Canada border -- at the Detroit-Windsor Ambassador Bridge and at other crossings -- are adding to the significant supply chain strains on manufacturers and other businesses in the United States,"
This will also affect demand across the board because consumers won't have as much discretionary income to spend after price increases eat up their paychecks.
For business owners this is causing a lot of changes in the way they do business. Normal purchasing schedules have been decimated by delays, cancellations and lock-downs resulting in cash flow disruption. Recently, it's started to become common for shippers to demand full payment before the goods even arrive!
"Importers who rely on credit terms are being hit with charges by their suppliers well before they receive their freight - which has either been stuck offshore, stuck at the US-Canadian border or stuck in rail and/or port terminals. The Walmart's of the world can withstand pre-delivery purchase payments. Small businesses however cannot, they rely on receiving those goods and often selling those goods before the bill is due, they will go bankrupt if this continues without relief."
Many of the problems have been self-inflicted from misguided policies that seem completely out of touch with how much actual harm they cause. Two recent examples I've seen are both caused by new regulations imposed to ostensibly save the planet - one is the "CARB rule" which will eliminate nearly half the truck operators at the Oakland ports because they'll need new "green" vehicles and this one I just can't resist mocking: "The total elimination of meat production to save the planet" because cows f*rt too much lol!
Joking aside, the perfect storm is upon us and for those who want to remain independent business owners and survive this turbulence much work is needed.
Most businesses have pricing power to maintain or even raise margins right now. Demand has remained strong in many industries and even increased as consumers look to lock in prices. Having enough capital now is critical when supplies are few and far between. Use your business revenues which are strong to leverage supply & material purchases.
This is the first time decades where borrowers stand to earn more on the capital they borrow than I do - Seize the day! Call me for a quote!