Gas and Grocery Prices Spike In South Dakota
Anyone who has drives a vehicle and buys groceries has surely noticed the dramatic rise in prices lately. Certain folks, namely politicians and the talking heads on TV and radio shows, are quick to blame the current Russia-Ukraine war for the rise.
The war is causing an immediate spike, however, prices have been on the rise for about a year and during that time inflation has reached levels not seen in over 40 years. We can debate on the probable causes; supply chain issues, the closure of US pipelines, the Federal Reserve printing and injecting trillions of 'petro-dollars' into the economy, but the point is we all end up paying higher prices.
On Friday, the US government announced a possible embargo on imports of Russian oil into the country. That will create a huge hole that we have no easy way to make up. The market has already begun responding to that embargo threat with oil prices spiking over the weekend to their highest level in 13 years. Remember what happened the economy to the last time oil was that high?
AAA reports that gas prices nationwide are now averaging over $4 per gallon. That's up 45 cents in just the last week and $1.30 from last year. States like California are averaging $5 per gallon, and some stations in LA are selling gas at over $7 per gallon. That is all coming to South Dakota if something doesn't change right now.
A recent survey reported by CNBC showed that at the end of 2021, 61% of Americans were living paycheck-to-paycheck and 42% of six-figure earners were doing the same. What does high fuel costs and grocery prices going to do to those Americans? What will $4+ diesel prices in South Dakota do to trucking companies that deliver products to our stores? We're already beginning to see the answer and in my opinion we are just getting started.
I'm not a financial planner, I'm just a guy on the radio who writes articles as part of my job. But if I had to give a theme of this story is 'prepare' for prices that you have never seen before. The best advice I can give right now is to hedge food inflation by stocking up on some non-perishable items before prices really explode in the next few months.