When someone tells you the house they bought for $250,000 last year "went up" in value to $500,000 this year what they're really saying is that one year later, it takes twice as many dollars to buy essentially the same house improvements and renovations notwithstanding.
So what's actually happening is this: The Fed has decided to pursue a policy of "stimulating" the economy by issuing new, unsecured dollars by the Trillions in a very short time, almost 40% of all dollars ever printed were created in 2020. Mind-numbing amounts of new dollars have flooded the market creating price "increases" which, as I described before are merely a manifestation of many more dollars chasing after the same amount of "stuff".
Amusingly, we can't seem to produce "stuff" faster than dollars anymore which is why we're all going to need more dollars for the same stuff; WAY more dollars!
Purchasing power erosion effects everything across the whole consumer daisy chain from energy costs (gas/heating oil) to food & restaurants. It's safe to say at this point that we "ain't seen nothing yet"! Many of us who were around in the early 70's when this happened the last time will be shocked by it now - the numbers are over the top in every-single-sector.
Our leaders don't see it lol: "The White House spun disappointing inflation numbers by saying consumer prices were on the way down while preparing the public for sticker shock to continue until next year."
Here's the best strategy to handle the challenge: bulk up and use your business leverage to acquire capital and use that capital (quickly) to purchase materials, supplies or make hires. The reasoning is simple:
Capital costs are way less than the increases in stuff you buy with it so it's profitable to borrow capital at fixed rate. You pay the same amount for the capital 12 months later but the stuff you bought with it could be double if you can get it at all. Ask any Business owner who stocked up on basic supplies at March 2021 prices!
Demand is not the problem for most of business owners I talk to. Their problems are finding good personnel, getting timely supplies and energy costs mostly. In fact, demand is quite robust in many industries I lend money to and capital is cheap compared to their growth rates.