Economic Fallout - Why Closing The Country Will Lead to Years of Problems

July 08, 2021 11 min read

economic fallout podcast

Welcome back, Survivalists!

On this episode of the Practical Prepper Podcast our newest host, Schmitty joins the family.

He’ll be here with you today to discuss critical aspects of the economic fallout we may see as a result of closing the country last year.

Are you concerned about the dangers of a recession threatening America’s future?

Aware of the growing crisis on the west coast?

Or, are you simply wondering why your local retailer’s shelves are still barren after all this time?

Then let this episode broadly provide you valuable insight into the current state and future of our economic climate.

Today's episode is brought to you by Valley Food Storage - the healthiest long term food storage you can buy.
Valley Food Storage is offering you an amazing 25% off coupon just for being a listener of the podcast. 

An overwhelming number of businesses were forced to close their doors permanently.

Many hard-working Americans were forced into desperation after losing their jobs.

Some are still facing overwhelming hardships to this day.

And, as we headstrong into the future, we can’t help but wonder what problems are waiting around the corner.

Schmitty provides a few of his predictions as to some of the serious underlying problems that we may affect us for years to come, describing what it may cost to return to normal.

The infrastructure we’ve relied on for generations may be forced to change to adapt to the situations that had impacted our free market.

As an aspiring entrepreneur, Schmitty was on the road to begin his own start-up company before the pandemic shut the world down.

Like many Americans and people around the world, Schmitty was forced to sit and watch the bright future of his business venture disappear before his very eyes.

Another soul, like so many others, who suffered incredible losses.

But, he learned a valuable lesson in preparation and adaptability since March last year.

During his time in lockdown, he began heavily researching current events to get a feel for what We as Americans could expect when the economy reopened.

He studied which previous economic recovery plans had worked and which one’s failed during times of historical crisis.

He researched the probabilities of which industries would bounce back with ease and reasoned why certain companies would struggle.

And, he discovered a little-known crisis happening on the west coast which impacts every major market around the world!

Remember to always prepare for the worst and hope for the best as we continue to strive and survive in this beautiful country of ours. Make sure you have your survival food buckets ready to go!

We hope you welcome our newest host Schmitty much as we have.

It may not be the most upbeat episode in our catalog, but neither is the reality of a crippled economy.

Enjoy this episode of the Practical Prepper Podcast and have a great day!

 

Transcription: 

Hello, everyone. Welcome to another episode of the Practical Prepper podcast. If my voice sounds new, that's because I'm new to the channel. I'm grateful to be here talking to you today. Briefly introduce myself myself before getting into a much more interesting topic and an interesting detail that I discovered while researching about the economic fallout that would result from closing down the economy last year and how it could affect the market for years to come. What problems it may provide to consumers and factory workers all across the country and even around the world. My name is Schmidt, and in 2019, I didn't find it necessary at all to prepare for any type of catastrophic event of the future. I didn't stockpile food. I didn't stockpile supplies. I relied on local markets to get what I needed at the time that I needed it. But within one week's time, I realized that that was a mistake. I watched store shelves clear out immediately. I watched resources dwindle away, my kitchen became barren, and I had to find ways to survive. So I started looking into survival foods and learned survival skills and traits. I prepared myself to be much more set for the future, and I'm actually grateful for the experience because it gave me an opportunity to learn how to protect myself, how to protect my family, and how to give all of us a sense of security, knowing that we won't go hungry immediately if the economy closes down again. And on that note, I am super delighted to bring you today's sponsorship. Now, this was a company that helped me survive and prepare for the future. This was the company that always left me the happiest. I've tried other survival food product companies, and nothing ever compared to Valley Food Storage. Valley Food Storage is by far my absolute favorite survival food company. It was the food that I turned to when 2020 started to go south, and I couldn't find anything at the local grocery store. What I really like most about Valley Food Storage, though, is how healthy their food is, especially compared to their competitors. I mean, other survival food companies will put tons and tons of low quality calories in their food, but Valley Food Storage simply doesn't do that. The ingredients are simple and clean. They're healthier. It's really nice, actually. And if you're interested in starting or even continuing your Valley Food Storage journey, then they're here to help you by offering an amazing deal of 25% off your entire order. This is the largest sale that I think I've ever seen from them, and it's only for listeners of the podcast, and it is truly, genuinely nice. And to unlock your 25% off coupon and enjoy any of their delicious meals. I mean, the chicken Ali King is something that I can't get enough of. Yeah, well, back to the show. Now, I also graduated with a minor in entrepreneurship in the hopes and dreams of opening up my own company. This came at a time where businesses were closing and I couldn't open anything. Hell, I couldn't even find anything. So with my time in lockdown, I decided to do a little bit of research to get a feel for the type of fallout that we'd be facing if and when the economy reopened. And in my research, amongst all of the threats of recession and everything else, I found one interesting little detail. Something that kind of happens behind the scenes, behind the curtain, something that you don't hear in the news too often. There's actually a crisis going on on the West Coast right now. It involves shipping containers, sitting on ships, waiting to dock and unload and not being able to. There's a massive build up of surplus on the coast during the initial days of the world coming to a screeching halt. None of those docks were allowing ship vessels to unload their supply because of health code restrictions. Many of those boats had to sit and just coast around in the ocean, going in circles, waiting to see if the fuel reserves were going to run out or if they were going to be able to dock. Entire shipping vessels filled with hardworking men and women stuck on these boats for months, questioning if they'd ever get to even see their family again, not knowing what the future the future would be for them or their factories absolutely facing an emergency because personally, it's a terrifying thing to be taken away like that. And since these boats are filled with products, for the companies that presented another emergency, eventually this means a production back at the factory was slowed down to a halt because they were overstocked on all of their supplies. The hard tariffs and health restrictions meant that they couldn't unload and go back to their place of origin to pick up more supplies. So factories are sitting on supplies, shipping vessels are sitting on supplies, and the retailers who are waiting for these supplies are going out of business. Now, if you're a factory producing a product, you're not going to produce a product that can't be put into a store because it doesn't exist to customers who are unemployed and can't afford to buy it. Now, with no place to sell them and no reason to increase or maintain their current workforce, of course, layoffs were inevitable. And with drastic fluctuations of variable costs far surpassing the viable rate of sufficient income to stay afloat, companies are looking at the bottom line of their shutdown price approaching them fast, and they begin to panic. With a lot of companies not having the flexibility to pivot their method of operations in a way which would sustain their business channel. In this open market that's been critically handicapped, they resort to modifying their hours, the size of their workforce, production lines, methods of operations, so on and so forth. But what they're choosing to do now forces them to deal with the situation that's currently on their doorstep. They don't have time or the opportunity to really formulate long term solutions that would sustain them in case another pandemic decided to screw up the economy. I mean, really, if you were to break it down to its base, none of the solutions that they're really taking advantage of provide any longterm protection for the company or the employees working for that company. They're very short term. And by eliminating employees and inflating prices to compensate for their losses, it doesn't prepare them for another situation like that in the future. That's terrifying. They may try to adjust their fixed costs and variable costs to sustain themselves for the foreseeable future. But the fallout that comes from that affects more than just the company. It's not the company that's just suffering a loss financially. It also comes down to the employees who are let go and they're feeling vulnerable as well as the consumers who rely and depend on the things being produced. I mean, it affects everybody. Closing down the economy may have been seen as essential, but it definitely results in some long term repercussions that we may not all be able to bounce back from. And that's the flip side of that coin because when you're forced into desperate situations, you become very innovative. But like I said before, with most companies not having the flexibility to pivot their production models or business plans, they're left, they're left behind or they have to resort to drastic measures. I mean, if you take the price of lumber now, the lumber industry can't just switch from lumber to plastic that would destroy their entire infrastructure. So what are we left to do? You can already see inflation slowly setting in to compensate for the financial losses from last year. And you even hear, like certain materials and products that are facing mass shortages. But it's not because they haven't been produced, it's because they're being distributed inefficiently. I mean, businesses have closed in. Stores aren't operating at full capacity because the shipping industry is stifled and supply and demand has been thrown into a state that it's never seen before or at least it probably hasn't seen for a very extended period of time. And when you ask what to do to reset the economy properly, you might not be able to do it with the old infrastructure. It might not be able to sustain the next economical generation or operation, depending on how things turn out. Bailouts and unemployment plans are short term problems that are easy to harp on. But the real issue lies within our previous infrastructure's difficulty in adjusting to what will probably be needed to jump start the economy again. And this applies individually to every city. Every city is different. I mean, with every city bearing different levels of negative economic impact and fallout with their own prolonged issues, a single fix all approach is out of the question. America is going to have to deal with this with each city working individually, which also arises complications when it needs to be taken to a federal level for clearance. New comprehensive economic recovery plans and business cultivations must be tailored for each city individually. You're not going to need the same plan to help fix Vegas that you'll need to fix Austin, Texas or New York to fix some little town out in the middle of nowhere. They're drastically different. I mean, that only means that the process to recovering the economy is complicated and extending the time frame to get the entire country as a whole back on track, it just becomes a chess game. And because there's no quick solution to fix what's wrong, those businesses who are currently at risk of going under after reopening are forced to wait and sit there and twiddle their thumbs. They're waiting for an alternative solution that they haven't found yet to relieve them of their financial struggles. And it's difficult. It's a catastrophe. If it doesn't come fast enough, then they go under. Then market availability of products begins to shrink. Getting what you need becomes more of a struggle. Eventually, online retailers start becoming your only option for everything. Even if you simply used to be able to go to a store and get it, but you left wondering if you'll ever actually get it because it can't be unloaded from a boat carrying it fast enough, and then what do you do? That's why it's important to prepare for the worst and hope for the best. But even with the economy slowly starting to come back, we never know what's going to happen in the future. I mean, employment numbers can go drastically down again or they can just skyrocket because we have new and innovative solutions that allow us to adapt to our current situation. And unfortunately, those processes are going to take time. And with the current state of the economy, who knows? But that's the thing. The economy just isn't the same. The economy is nowhere near what it was several years ago. And the old methods that we had to boosting our economy once used to work for small select sectors, definitely don't really pertain to an entire nation all at once as a whole. And the government can try to help out with stimulus checks or whatever type of relief plan that they want, but that really doesn't offer long term solutions. We're going to see companies that will eventually go under. We'll see new companies arise in those same places. But when it really comes down to supply and demand, if you can't even supply it, that becomes a real issue. Let's just take a restaurant chain, for example. Let's say there's 100 restaurants across the country that all different in their structure, offering a very similar dish. And if that ingredient or that supply can't be brought in or distributed evenly across those restaurants, then they start changing their menu. They start changing what they offer to customers. Therefore, all of a sudden that product that used to be a hot commodity is now in surplus. And even if they start demanding that product and offering to pay more and what little that can be shipped out gets those restaurants, it inflates the price of it. And eventually it gets to a point where customers no longer have an interest in it because it's out of their price range. It's out of their comfort zone of paying for that item. So then you have another problem with being overstocked and mass supply. What do you do then? If your entire industry was built on providing this one product that no longer is in demand because prices are either too high or the stockpile that you have supposed to go out never did, what do you do then? Especially if it's an industry that can't pivot their business operations. Massive industries may see a day where they have to completely swallow the tough pill of spending everything. They have to revamp themselves, revitalize their business models or they simply go under. And that's terrifying because that's a massive change to what we were used to. And I know we've all experienced enough of that as of late. It will be very interesting to see what the future brings for all of us. How the fallout of closing down the economy last year will affect us for years to come. Anyways, I would like to thank you all for listening and I would especially once again like to thank our sponsor, Valley Food Storage by offering their 25% off coupon code. Just go to valleyfoodstorage.com/practicalprepper one more time. That's valleyfoodstorage.com/practicalprepper. They may offer food but I also found security in them. Now I would like to thank you all one more time for listening and I hope you all have an amazing day. Bye. And I wish nothing but the best and brightest for the future for everyone here and across America. Have a great day.