With just a bit over one month left in 2022, businesses are making their mad dash into 2023. As of this writing , reports on Black Friday are weak. Many retailers depend on Black Friday to generate their entire year's profit. That may be a failed plan for some.
Businesses that watch their monthly P&L and use it as a management tool to tweak day to day application of plans and programs can have increased results and not end up in the last month trying make the entire year. Of course, retail depends on traffic and the Black Friday "steals and deals" can drive em in. But deep discounts play against profits so it takes some shifty sales planning to virtually give away one and charge plenty for another. It's not bait n' switch but loss leader thinking on steroids. In contrast to this, I saw Bezos actually telling people to put off buying that new flat screen because of the rough times ahead. WTF? That's a first rivaling Macy sending customers to Gimbles in the Miracle on 34th St.
On a personal note, I enjoy spending on my family and loved ones and I do try to keep my purchasing patterns local but at times the online free shipping deals are hard to ignore. Retailing is a tough business and even retail sections in coffee shops and salons and other businesses have their job cut out to drive the client to the retail wall. Supply and Demand struggle to find each other and now it is supply leading the charge with moderated inflation weary Demand limping behind.
The monied bubble some live in like our political class has them saying stupid thing like Clyborn's "when people look at their bank accounts they're happy"...what planet is he on. Inflation has reduced purchasing power and in my view it will continue even if a little less so. An item bought just 2 years ago for $100 will cost $115 now. that's a cumulative inflation of 15%. Another way to look at this is that the currency ie USD, is only worth $0.85 relative to its full $1.00 2 years ago. That is called currency debasement and governments are superb at it. Fiat or paper money backed only by the government's say so or edict and guns is readily debased by printing more of it. More currency thins out the value and purchasing power. Inflation is harder to create when a currency is backed by Gold or Silver or other hard assets. Read up on the BRICS cabal's new ideas on a new reserve currency. It's coming.
Regardless of purchasing power, some things are necessities of life so we all just pay the piper his due. What is a necessity can be brought down to food, clothing and shelter with a dash of healthcare. We are so accustomed to abundance and a myriad of choices on the shelf that times like these can shock some who have never witnessed similar before. I think that is a failure of our schools. The average college grad doesn't know much about history especially as relates to money, markets and the like. Few are still alive from the Great Depression so kids ask, what it is. Well the new Depression will be their answer and inflict some hard lessons.
Make the mad dash. I hope you succeed. Reevaluate necessities and hunker down. A storm is coming and it's name is Hurricane Depression. Be assured that there were plenty of go getters that got rich in the last great Depression. That will be true again.
Best,
Donn Marier
DM-Your Own CFO