What Will Inflation Do To Soft Goods Prices?

What Will Inflation Do To Soft Goods Prices?

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This past February we posted a pair of articles about food safety — Managing Your Food Storage Space Wisely and Should You Stock Up On Groceries In Advance Of Inflation? — sharing our thoughts about buying food in bulk and keeping it on hand for many years to come. Basically, we were looking at two reasons for taking such an important step: possible food shortages created by any number of events (political, natural catastrophe, etc.) and as a hedge against inflation.

basementAnother area for consumers to consider making bulk purchases is with soft goods items. That category includes napkins, paper towels, tissues, toilet paper, feminine products, paper plates, paper cups, etc. Oftentimes we can overlook buying these items in bulk for the simple reason that soft (dry) goods demand on storage space can be quite high.

Where to Store Your Soft Goods

Beyond stuffing a linen closet to the rafters, where else can dry goods be stored? Several places actually, some better than others:

Your Garage – If your garage is fairly well regulated as far as temperature and humidity goes, then you quite possibly have an area in your home ready made to store large quantities of soft goods. Even if your garage is humid or gets very cold in the winter, plates and cups have a better chance of withstanding harsh conditions, while some paper towels and napkins may turn yellow or attract a musty smell.

Your Basement – As with your garage, if your basement has a fairly even climate, then it could be the best place to create a dry goods storage area. Recommended: a dehumidifier. You want to control moisture and eliminate mustiness.

Your Attic – Not recommended unless it is finished off and used more like a “bonus” room found in some homes with a room above the garage. It probably isn’t worth your investment to redo this area of your house to turn it into a storage area especially if it is unfinished. You’ll also want to think of the potential fire hazard – dried paper goods can go up in flames in mere moments, taking your home with it.

Why Store Soft Goods?

So the question that remains is this one: why would you be interested in storing dry goods in the first place? Probably for one reason mostly: as a hedge against inflation.

Many economists are worried that inflation will rear its ugly head sometime in 2010, perhaps before this year ends. With inflation comes price increases, some which can be enormous. If your soft goods are petroleum based (cups, plates, plasticware) then these prices can increase sharply if oil prices climb as they did last summer. Few people expect gas prices to stay below $2/gallon for much longer with prices expected to climb above $3/gallon later this year, perhaps topping $4/gallon when expected tax increases become law.

Regardless of what takes place at the pump, a $3.6 trillion spending spree by Congress and the Obama administration will saddle generations to come with debt. Of course, one way to handle debt is to devalue your assets which has the same effect as inflation: it makes whatever you want to buy more costly to you.

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