Living Through Everything Wrong with this Economy

I have to admit that one of the perils of being more at home since 2020 for work and in general is that I have been often captured by the media and news with their headlines. While I have been reluctant to accept many of the headlines at face value, I have recently continued to realize that many of the issue we hear are in fact happening. While I am in a relatively good spot financially despite these challenges, my concern is how many others will be able to deal with these issues as they persist?

First, from a personal perspective mortgage rates have been crazy to see rise the way they have. In my recent journey of buying a home again, I saw how close I was for that not becoming a reality for me and my family. It was surprising for me to live as I thought that a person with funds for a down payment, a very high credit score and no other debt would find it easy to get a mortgage. However, lenders were difficult to lock rates and tougher to provide approvals. To add to the challenge, my longer than expected process saw my rate go from 3% at prequalification to 4.25% in a matter of 90 days! This added almost 15% to my monthly payment for the same house I contracted!

Next, inflation has been hitting everyone very hard. I am seeing the impact in two side. My small but necessary home improvements for the new home have been much more expensive than I had budgeted. Everything from paint to lights have been increasing in price since I had last purchased them. I also find myself suffering double from groceries as not only have prices continued to increase but the amount in packages are smaller! Eggs have doubled this year alone!

Another experience I have been having related to my new home is the never ending story of supply chain issues around the world. The availability of equipment and furniture for the new home have been an issue. We purchased a new bed and it took three weeks to deliver! This has also impacted prices as I used to wait for Sales when inventories were high to get discounts. They are rarely found these days. I believe this supply chain issue has also led to a decrease in product quality. I imagine that manufacturers are just rushing the production of these goods as I have found myself taking things back to the store when they do not work. It has never happened that frequently to me but I went to the Hardware store twice in a weekend for a ceiling fan and a lamp!

Lastly, from a professional and business perspective I have seen how the tight labor market is impacting businesses. I have never seen the pace of people moving jobs as the Great Resignation is real! It seems that it is related to inflation as Companies are surely paying up for talent and labor. The market for talent has been furious as I hear the offers that are attracting colleagues to move Companies. I welcome this part as I believe that organizations have controlled the labor market too long as have expected loyalty to only be one-sided.

The implications of these trends are concerning given their long term impacts to not only the economy but also to markets. If they persist, we could be in for the long awaited “Reset” that many talk about. That maybe too far along the media spectrum but I can say that I have never experienced these trends so closely before. How we each prepare will be key for our future. I am encouraged by the long term prospects of the decentralized economy which I believe will be the solution.