Let’s start off imagining you are driving down the road in your car. You’re just cruising along. Maybe you’re listening to your favorite radio station with the windows rolled down. Everything is fine until suddenly there’s a noise from your engine. Maybe there’s a sudden grinding somewhere or a high-pitched squeal. Everything was fine a moment ago, but now your mind is frantically racing. How much gas do you have? When was the last time you had the oil changed? When was your last tune-up? And so on and so on, until you pull over, dead on the road, and have to figure out your next move. Somewhere along the way, the perfect system that was you getting in your car, turning the engine over, and driving from point A to point B failed. All the world is a series of endless systems. When they are finely tuned and operating without flaw, we hardly notice them. We barely understand their machinations.
As a prepper, watching this channel right now, you have the opportunity to be ahead of the curve. You have the opportunity to recognize the signs I will point to here and prep to insulate yourself from the impact of their failing. Our current systems have evolved and fine-tuned themselves over time, so even history only provides marginal insight. Nobody can accurately forecast the future, but we would be foolish not to acknowledge the signs and assess the storm’s strength on the horizon. Here are the four signs of trouble I see right now as they reveal themselves in real systems that sometimes overlap. You would be wise to do as I am and prep accordingly.
SIGN #1: INPUT DOES NOT EQUATE TO OUTPUT
The USDA began keeping statistics on beef consumption in 1932, when the average amount consumed per capita was 32 pounds per person per year. Innovations in the cattle industry, an abundance of feed crops because of better agricultural practices, a streamlined and finetuned processing operation, and better refrigeration methods increased consumption to a high of 88.8 pounds per person in 1976. That’s a lot of roasts, steaks, stews, and hamburgers. Since that high in the ’70s, beef consumption has dropped to a manageable 55.5 pounds of beef per person per year. It may seem like a small number, but if you just calculate people 18 or older in the US, that’s a staggering 11.6 billion pounds of beef. With a number that incredibly high, you can see all the parts of that system that have to go right to move that amount of product. You have to have input that can equate to that 11.6 billion pounds of output. The signs are there that we don’t, so let’s examine the input problems.
Cattle need food and water to grow big enough to be slaughtered. We then need the right skilled cutters and facilities and meat packers. We need the refrigeration capability, and we need a healthy consumer market. This is an oversimplification of the system for the purpose of illustration, for sure, but let’s focus on the first inputs: food and water. America is in the depths of a multi-decade megadrought. The results of the high heat and ultra-dry climate are less water and higher prices for water. Likewise, the crops of feed grains, hay, silage, and stems from corn, wheat, and oats have smaller harvests.
Growing this feed requires water and sometimes fertilizer. The cost of both of those has gone up. Growing this feed requires low-cost diesel fuel to harvest and process it. The price of diesel has gone up. The farmers are struggling to break even. More than 50 percent of the U.S. beef cow herd is directly threatened by drought. Across the country, more than 50 percent of pastures and ranges are rated to be in poor to very poor condition. The bleak prospects for pasture and hay production, combined with the continued diminishment of hay stocks, suggest that significant and severe impacts on cattle herds are ahead as summer approaches.
If you know a farmer or a trucker, talk to them about the costs right now. These are the people at the front of the input of this system. You may have also heard about the recent reports of lines of trailers lined up to drop off livestock at auction. Cattlemen are anxious to sell their livestock while prices are high because they already feel the high costs of feeding and tending to their herds. Their input costs, also known as variable costs, are skyrocketing. Before that reaches you, the consumer, because all rises in costs eventually get to you, there will be a surge in beef inventory. Those processing plants and refrigeration facilities will be packed. You may even see some great deals on beef as grocery stores try to unload inventory to also take advantage of the cheap and plentiful beef coming in on their manifests. But, if the input is the food and water required to produce a healthy cow herd, and the output is the end beef product, what happens when the national herd levels are low? What happens after cattlemen have reduced their production to try and find equilibrium and profit? Well, you get a shortage of products at the same level of demand. That leads to the second sign of problems in the future– depletion of inventory.
SIGN #2: DEPLETION OF INVENTORY
There’s a whole bunch of frozen beef. The system is designed to absorb as much impact from temporary problems as possible. The United States also imports a good percentage of beef from Canada, Mexico, New Zealand, and Australia. However, as economies worldwide continue to erode, the cost of imports increases. Some countries stop exporting altogether. Inventories can actually run low. Then the conversations those cattlemen were having are suddenly vaulted into the mainstream media, and panic buying can set in across the masses. This further exacerbates the problem by further depleting inventories. Input not equating to output grows into a much greater problem.
This sign we should be noticing has recently been observed in the fossil fuel industry. The problems are numerous there. There are permits granted, but no drilling is taking place. There aren’t enough refineries to keep pace with the demands of a car culture. There isn’t enough product to fuel the power plants that feed our homes. Even the Strategic Petroleum Reserve is only 727 million barrels of oil at its maximum. We consume about 19.78 million barrels per day, so that’s only enough to last us 37 days.
We have seen this depletion of inventory sign in the microchip manufacturing sector. Today’s cars are computers with wheels containing more than 100 microchips, powering everything from climate controls to shift timing. Microchips are everywhere. In 2020, more than 932 billion chips were manufactured around the world. They power everything from your gaming console to your blender to your refrigerator, TV, radio, computer, router, and so much more. With the global lockdowns, supply chain disruptions, and a drought in Taiwan, the producing country of half the world’s supply of microchips, the available inventory of microchips was depleted. This led to a surge in price for any electronic item you purchased. It slowed down the trucking and farming industries, as parts needed to maintain a fleet of vehicles suffered. It led to a huge jump in the price of new or used cars, resulting in a dwindling of the supply of cars in inventory.
With any resource or supply line, you can see the consequences of Sign #2, a depletion of inventory. As a prepper, you should always look for these possible depletions and extrapolate out the true impact they will have on you. Just as you might assess your food and water resources in any new environment, you have to also examine the threats to your supplies based on the level of inventory. Is the inventory level substantial enough to weather whatever small storms and minor crises that are occurring? Is there enough beef in warehouses for a reduced output level for several months, a year, or longer? The third sign of compounded problems will determine the answer to that.
SIGN #3: COMPOUNDED PROBLEMS
To reference our earlier example of the car, you have a couple of choices when the check engine light comes on, and an unknown squeal comes from your engine. You can keep driving and pray you get to your destination, or you can pull over and try and diagnose what’s wrong. In life, as with people and their cars, most cannot diagnose the engine problem and require input from others to maintain their system. Many will just continue along their paths as if traffic flow will magically propel them forward. A prepper, on the other hand, isn’t going to go with the flow of the status quo. A prepper starts working on a solution and draws upon the preps they have thoughtfully and purposefully put in place.
Let’s assume the car is driven despite the warning lights and the noise, maybe even smoke. It will probably break. One part failing puts pressure on other parts. One belt breaking may result in another part overheating which may lead to another part seizing up. Before you know it, the whole car could fail and catch on fire. These supply chain systems, our power grid, our municipal water supply, our communication systems, all these systems we rely upon and take for granted, all can suffer from multiple disturbances.
When fewer people were leaving work to grab a fast-food lunch, suddenly potato farmers found themselves with an excess of potatoes that were no longer needed for french fries. Some resorted to digging big holes and simply burying tons and tons of them. When skilled meat cutters fell sick, the new supply of cut meat was reduced. Fortunately, there was an abundance of stored, frozen, already processed meat, but then there was a supply chain problem of sourcing those little styrofoam trays your meat is packaged on top of. When everything shut down, on-site consumption of beverages disappeared as well. That left many breweries and beverage producers to turn to or up their use of aluminum cans. That, in turn, resulted in a shortage of aluminum for cans. Even in times of abundant production, you can have shortages.
The most glaring current problem is the lack of fertilizers being produced from natural gas. Liquid natural gas is rising in price, is being embargoed, and is being prioritized for heating homes over being used for fertilizer. Fertilizer plants use an industrial process to generate the intense heat and pressure required to separate the nitrogen atoms and combine them with hydrogen from natural gas to produce ammonia. That ammonia is used to produce urea– a fertilizer and diesel additive. Less fertilizer is produced at higher prices when that gas is needed instead to directly power homes. This forces fertilizer manufacturers to reduce output to align with what the market can reasonably bear. This forces farmers to rethink and reevaluate their crops– perhaps switching from soybeans to cabbage, for instance. But now, fewer soybeans are available as animal feed, for the production of Ethanol, or for the creation of plastics or oils. Each of those shortages will compound other problems. Before you know it, manufacturers who use 61% of the soybean oil produced can no longer make their products. These products are FDA approved with specific formulations. It isn’t like they can just dump some corn oil in their mix and call it done.
One of the signs to look for in such a finely tuned supply chain is the compounding effect of one raw materials shortage. The most severe shortage we are currently facing, which will have a compounding impact across every aspect of our lives is the severe diesel shortage of Diesel Exhaust Fluid. DEF is a solution made up of urea and de-ionized water that is needed for almost everything that runs on diesel. Every diesel truck manufactured since 2010 is required to use DEF. DEF’s critical ingredient is urea, a derivative of natural gas. It’s also used as a fertilizer. The problems of a shortage of this vital component I have already outlined. They can’t just roll back the DEF requirements, either. Most every truck on the road has a DEF warning. When it is ignored the truck either will cease to function or will go into “limp home” mode, with limited power and a limited number of times the engine can be turned over.
The compounded problems of this crisis are limitless. Farmers won’t be able to run their operations. Truckers won’t be able to get anything hauled those final miles. Trains will stop, along with boats and barges. Absolutely everything will grind to a halt.
SIGN #4: SUDDEN SUPPLY OR DEMAND SHIFTS
The final sign occurs perhaps too late for anyone to effectively act upon and stay ahead of the curve. Sudden supply and demand shifts like panic buying and hoarding deplete inventories and are like throwing fuel on a fire. The whole system, struggling to regain its footing, can’t catch up and find equilibrium. It often then results in a complete failure, collapse, and a need for restructuring or decentralization. It can take months, if not years, to reformulate these systems. In the meantime, the economy suffers blow after blow, and the tumultuous supply and demand shifts ripple out across other, seemingly unrelated industries.
The run-on toilet paper in 2020 also saw panic buying of beans, pasta, rice, and countless other staple items. The shelves of the pasta and canned goods aisle were also empty. Watch for the sign of a sudden supply and demand shift in consumers. Watch for panic buying or hoarding activities. Though when you see either, you may be too late to prep any further.
CONCLUSION
Everywhere you look these days, there are signs of systemic supply chain failures on the horizon. The problems are too numerous to detail. There is not a single state in America where a full-time worker making minimum wage can afford to rent a two-bedroom home. The available inventory of homes for sale is dropping. ERCOT is warning Texans to reduce their power use or face rolling blackouts, and the drought and high heat continue. There’s a downsizing of herds going on right now. There’s a critical shortage of fertilizer and urea. There’s a looming diesel fuel crisis in our future. We don’t want to scare you, but I can’t sugarcoat this either. You must prepare to endure extended shortages, higher prices, and maybe even a total economic collapse. Time is running out.
Get a plan like the Prepper’s Roadmap and minimally secure food, water, and energy sources. It might not be enough to sustain you solely, but it can be enough to get you through until an equilibrium of some kind is restored. As these problems continue to grow in scope and reach, watch for input not matching output, depletion of inventories, compounding problems, and sudden supply and consumer demand shifts. Recognizing these early signs of greater troubles to come will put you ahead of the masses and will position you to be better equipped to endure the challenges of a more complicated life. If you see any one of them, you need to act fast.
As always, stay safe out there.