Many people still think that what they've been doing for work is going to be OK in the future, but the data now shows that's not the case.
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So, it time to reevaluate.
You need something with a dynamic growth potential. Something that works at the speed you want to work at.
That's what sales brings to the table.
That's what Network Marketing brings to the table.
Prospects need to understand when situations change.
Re-evaluation is a must.
Inflation Just Exploded
When you see a graph that looks like this (this one is 1960-2021), it's time to reevaluate. You have to take a look.
This is from FRED (Federal Reserve Economic Data), having to do with the feds and the amount of money that was pushed into the economy. It was just a gradual increase, and then all of a sudden, boom, it goes straight up in 2020. I would dare say it's gotten even higher.
What does this do? Causes inflation. The Federal Reserve, who loans the federal government money, has toggles. If you think about sitting in the car, you have the turn indicator, and the windshield wipers – you have knobs.
The Federal Reserve has the ability to fiddle with some of those knobs. One of the things that happens is inflation. Certainly when there’s five times more money in circulation, then that's going to cause some damage.
Let's talk about it. I know a lot of people get a little drowsy when they hear the word “inflation,” so let me just make it really simple. If this month you got a gallon of milk and it cost $4.00, and then six months from now, it costs $4.50 cents, the amount of that increase is called inflation. A lot of people are very unaware of the damaging effects that it does to their purchasing power.
When you look across everything that you buy and you say, “Wow, I'm just not able to buy as much stuff as I used to,” that's the situation.
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It goes all the way across from building supplies to gas and oil, to anything that you can purchase. It inflates the price. To some degree, it's always the case. It typically runs at about 3% or so a year.
Let's take a look at some examples.
Costs of Container Shipping Hit $10K
This is the cost of a container shipment. People manufacture, let's say, some stuff over in China, and they put it onto a freight ship and ship it over to America.
[cost of container shipping]
All along since 2011 for the last 10 years, it's been right around this price category of $2,000 per container, and then it suddenly jumps up to $10,000. Do you think that's going to add price to your loaf of bread? Yeah, it is. How about gasoline prices?
From July 2020 to July 2021, there’s a 46% increase. That's a whole lot more than a 3% increase a year. It's 46% in 12 months.
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Gas Prices Are Up 46% in 12 Months
This is the actual price of gas as of 12 July, 2021.
Venezuela is paying $0.02 a gallon. This chart is sorted by price per country. The next would be Iran, then Angola and so on.
In the United States, it's $0.92 a gallon. So why is it that the prices we are paying for gas are so much higher? I want you to take a look at these numbers:
- $4.00 in California
- $3.80 in Hawaii
- $3.50 in Nevada
- $3.50 in Washington state
- $3.50, $3.30 in Oregon
- $3.33 in Utah, and so on with Alaska, Illinois, Idaho, and Pennsylvania
Where did that extra come from? Some of it could be from shipping if they have to ship it. I think last year, we were energy independent, so we did not have to purchase oil from somewhere else and have it tanked over or pipelined through.
That had a factor in it.
What other things could have a factor in it? Negotiations. That could be another one. Different things are going to affect it.
I began to look at perhaps the price is being jacked up because right now what's in the agenda is to penalize you if you keep buying oil and reward you if you get an electric car.
I get an idea that such a high move on this has to do with something like that. It's just an idea that I have, you don't have to have that same idea.
Lumber Prices Have Skyrocketed
Lumber prices also hit a steep rise recently. Look at this graph. Pretty incredible.
According to realtor.com, the typical home asking price hit another new high in May of 2021 by reaching $380,000.
I did a Blog Post just last week that had to do with real estate agents and such, and the average home price I was quoting was $225,000. So it's jumped up a lot, an increase of 15.2% compared to last year.
This gives you a real understanding now. If you spent $50,000 worth of lumber, how many houses could you build in 2020? You could have built about 10 homes, but today you can build 2.1 houses.
I hope this image gives you a good understanding and wraps your head around purchasing power.
When I talk about that a person's not looking at network marketing because they're not looking at reality, I’m talking about that they think what they've been doing is going to be okay in the future. These statistics do not show that at all.
Highest Inflation in 13 Years
You can say, “Oh, we're just in this particular timeframe,” but we’re having the highest inflation that we’ve had in 13 years.
The CPI has always been the standard that we've used. They are the people who are saying that inflation is higher now than in any other time in the last 13 years.
Then they spotlight some categories.
So you can see now why I made that statement, that energy as a whole is up 24%. That would be diesel and all other types of fuels. It's sticking up a whole lot as an indicator to me.
They're Skewing the Numbers -- It's Worse Than We Thought
Now I'm going to focus on that CPI for just a second. Calculations have changed, and you need to know this.
The government has a few resources at its disposal to manipulate the CPI. First, the Bureau of Labor (where they get their statistics from) operates under a veil of secrecy.
The raw data used to calculate the CPI is not available to the public. We call that hidden data. You can't find the truth.
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When I asked why, I was told it was so companies can't compare prices. This makes very little sense because companies can easily compare prices with data openly available on the internet, or just by walking into a grocery store and asking what the price of this or that is.
It also makes it impossible to audit their findings. Additionally, over the past 30 years, the government has changed the way it calculates inflation more than 20 times.
These methodological “improvements” to the CPI are said to give a more accurate measurement of consumer prices. However, these changes could also be a convenient way to include or exclude certain products that give favorably low results. But there's no way to know, given the lack of transparency.
I'm bringing this to your attention because there is a group of people who continue to calculate the CPI the old way, and have plotted it on a graph versus the officially reported CPI (which has changed its calculation methods 20 times during this period). The official report shows the CPI is increasing about 5% at the peak, and the average is around 3 ½%.
But by the old way of calculating it, the CPI increase is about 13-14% so far this year, and the norm is around 10%.
I really recommend that you take a look at this group at shadowstats.com.
They did a really great job of keeping up with it. They created a group of people who go into the grocery store and they buy things, and then they are constantly updating in different towns. From this they have created their own computer price index, which is what CPI stands for, because that's all that it is.
You can do it for yourself when you go to the grocery store. Just pick up an item. A lot of times on the ticket, if you put in, for example, a bushel of spinach, it'll tell you how much it is per ounce. Keep those prices and then see what it is six months from now, see what it is a year from now. Then you will know in your area, very specifically, what the inflation is.
Salaries are Flat
Obviously, if we have a 3% inflation on average, then we need to make more money just to stay even.
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Let's say that we had a bank account that was paying us 3% interest. Well, if we had all of our money in there, that would be cool. But we don't have anybody giving us 3% interest anymore. That's out.
It would also be great if we had a 3% increase in income every year. I started looking at that and I factored that in here.
The average salary structure increase fell to the range of 1.3-1.6% in 2020, and is generally expected to stay the same through 2021.
Let's take a look at this. Let's say that you made $30,000 and you spent all $30,000 on stuff.
The inflation rate is truly at 10% based upon that Shadow Stats graph. That means that if you spent $30,000 this year, then in 10 years, you're going to need to have $77,000 to buy the same stuff.
- I want you to think about it from the standpoint of raising a family.
- I want you to think about it from the standpoint of retirement.
- I want you to think about it just as a long-term strategy on what you're doing, how you're spending your money, and what business you're in.
- And does it have an ability to have a dynamic growth going on within it?
That is what network marketing brings to the table.
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Now, if we were to add a 3% pay raise a year, let's say that you have a job and you get a 3% pay raise, or you grow in network marketing at 3% per year, then you would basically have to make twice as much.
If you spent $30,000 this year, 10 years later, with 3% increases per year, you're going to have to create double that amount in order to live on the same stuff.
I have to show you this scenario because it's a real life scenario. In 2016 Venezuela entered hyperinflation. We have inflation, but Venezuela is of out of control.
The inflation rate reached 274% in 2016, 863% in 2017, 130,000% in 2018, 9,500% in 2019, since 2016, the overall inflation rate has increased 53,000,000%.
The reason I'm showing this to you is that they had a similar political situation at that time way back then. It was a similar type of scenario, not the same. It was just a typical move that we are seeing. These guys used to have an incredible economy. It really is saddening. I hope that doesn't happen here. That's going to be very expensive.
Shrinkflation
There's another thing that's actually funny. It's called shrinkflation. The size and weight of items are shrinking, but the cost is the same.
Let's pretend that I buy a bottle of water and it costs $3.00. If they only filled the bottle halfway, but still charged $3.00, that you would call shrinkflation.
But that would be very obvious. I pull it out and look at it and say, “I don't want that.” Typically, it's right up to the top.
I've seen shrinkflation in toilet paper. I've seen shrinkflation in paper towels. The paper towel used to be this big and have a particular ounce weight, and then I see it as being almost a quarter of it gone. The inside of the wrap is a whole lot faster to come off than the outside of the wrap.
They're shrinking the product, but charging you the same. They are being honest on the weight, but it's a bit unethical if you ask me.
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Dr. Shiva on Unemployment: We're Getting Squeezed
Dr. Shiva is a gentleman who ran for the Senate in Massachusetts, and he's an MIT PhD. He's got three degrees and is very mathematically smart, as well as in engineering and such.
He says that right now, 25% of Americans are out of work. That's what he says, based upon all the evaluations that he's done.
He said that there are two American pies. One is 5%. And the other is 95%. The 5% consists of 600 billionaires who doubled their wealth in the last year, during the pandemic. The 95% consists of the rest, who have been squeezed since 1970, with no real increase in income, inflation adjusted.
By “inflation adjusted,” I mean that when you account for inflation, true inflation, then they haven't gained anything in since 1970.
That also fits with what a gentleman by the name of Ray Dalio says. In my very, very early videos back two and a half years ago or so, I talked about where he had shown the data.
When you say “the average income of an American,” if you were to pull down the top 5% and look at everybody else, then the average income is going to run around $35,000.
You've got unemployed people; you've got discouraged workers. What are discouraged workers? They can't get their old job back.
The pandemic ended up giving business owners an opportunity to dismiss the people that they wanted to get rid of. They're discouraged because they can't get that job back and they can't get another job, and so they stop filing for unemployment.
That's going to shift the unemployment numbers. When the government reports unemployed, it's only the people who have applied. If they stop applying, everybody assumes they got new jobs.
No, not necessarily. They became discouraged workers.
Also there are some people who, if there is a particular thing mandated and they don't want that thing, then they don't want to go back to work with that. Those are some of the scenarios that I'm looking at.
On the other hand . . .
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New Reality
This guy has a great channel. He talks about a lady that has a lot to do with Real Estate and such, and the “new reality.”
“Wait, what?” That's the way that I viewed this. I couldn't believe what I saw.
The real estate market is really booming. BlackRock is an organization that the federal reserve is partnered with and BlackRock is going out and buying up houses. Along with Invitation Homes, they purchased 15% of the nation's homes in the last quarter, at 5-20% above the asking prices.
Why would somebody want to do that? Why would the federal reserve want to take that money and then buy assets? Real assets don't depreciate as much as the dollar that's constantly getting hammered by inflation.
That started to make sense to me, but then I thought, “Wait a minute!”
You just have to think that through: it's not a free market.
If taxpayer’s money is what's going into the system as well, and they're purchasing real estate, it's going to drive the prices up.
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Own Nothing, Be Happy
I saw a very interesting couple of things. I saw this entire series called “You’ll Own Nothing, and You'll Be Happy.”
I also saw “America Should Be a Nation of Renters” on a Bloomberg report.
I thought, “What?”
This is definitely changing.
Three of the employees at BlackRock are working inside of the Biden administration at the White House. They would probably have the knowledge. They're buying up properties while you have the media telling us that we should be a nation of renters.
That alerted me that if that doesn't work from the standpoint of you don't want to be a renter.
Maybe you're 22-23 years old, you want to start a family and you want to be able to have a yard and to be able to have this and that and own it and know that you own it and be able to fix it up when you want to and be able to do all of the things that home ownership provides.
Maybe you want to have a particular house in an area, like I wanted to be in the mountains, near rivers and things like that.
When I started this Blog Post, I was telling you that you have to reevaluate when conditions change. Some people may have made a decision to be that doctor, or to be that bus driver.
You can change that at any time.
When conditions are as severe as this, it might be a good time to re-evaluate it, and do it rapidly.
I'm just going to add something to this. This looks a little bit crazy, but let me just walk you through it so you really do understand it.
Obviously this spike is the pandemic. This is the number of unemployed filed. It peaked up here at around 24 million people, then it begins to slide. It slid down and it started running level.
I drew this top dotted line, and I drew this bottom dotted line at the level of the previous norm. There's a gap of 3 million people.
3 Million MORE People Out of Work Than Before
Do you get the idea here? Is it actually going to come back? Are we about to hit another scenario to where this spikes back up? We could.
That is what I'm wanting to have you guys take a look at.
Then pretty soon if it's constantly spiked, then we're going to be in a bit of trouble as a nation, in terms of recovering from that, both on the inflation basis, as well as the number of unemployed. It's a way to look at it.
It hits us at a place where we have a lot of debt.
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80% of Americans are in Debt and Vulnerable
80% of Americans are in debt, vulnerable to being controlled.
Freedom matters.
People are in debt and what's the biggest debt? Well, it's their mortgage. Student loans are second and auto loans are third, and then personal loans.
Credit cards run about $5,000 on average.
All in all, 80% make up $9.4 trillion of debt that people owe. That's going to be a real tough scenario for people. It really is.
Idea: Start a Business to Increase Your Income
I think that it would be an idea from all this data to do a business. At least you'll be able to earn your own money so that you can increase your income, because normally with salaried income, you can't get a lot fast.
When you're in the sales world, you can work at the speed you want to work at. You can build a sales team at the speed you want to work at. That was my primary reason why I wanted to be in network marketing:
Not looking at the economic reality, with inflation at 5-10% right now, and the future holds, is something you might be running into with your prospects.
I hope we're not Venezuela.
We have fewer small businesses. There's been a great consolidation that's gone on. If you remember back when we had “essential items.” A lot of businesses got shut down because they weren't designated as essential, even though they were selling perhaps the same things at Amazon, Costco and Walmart. But those guys ended up making bank because of the consolidation of all small businesses.
There’s unemployment, fewer jobs, and debt. There were a lot more small businesses that are no longer around.
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How are you being impacted? I Want to Know
What do you think? How has the economic environment changed for you?
Do you see that it's changed?
What are you experiencing?
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