Inflation is at a 40 year high. What can history teach us?
&gt; <i>But if the main driver of inflation is the demand side, or inflation expectations, history indicates that a painful recession could be the only way to curb inflation.</i><p>That&#x27;s certainly the expected path forward, at least in the circles I associate with.<p>&quot;When the tide goes out, you find out who&#x27;s swimming naked&quot; seems a reasonable guess as to what&#x27;s going to happen.  Both at larger bank&#x2F;investment firm scale and at the individual level.<p>At an individual level, just how much slack and flexibility do you have in your spending, your finances, your general way of living?  If you&#x27;re a high earner (there are certainly plenty here that would qualify), are you spending that on lots of monthly payments of assorted luxury and stretch items (house, cars, all the other crap you can get loans for)?  You&#x27;re probably going to be in a world of hurt - there&#x27;s no income so high you can&#x27;t outspend it, and it&#x27;s really hard to adjust those payments when the value of money goes down and you need more for the living expenses.  Also, those payments don&#x27;t go away if your job is eliminated.<p>If you&#x27;re comfortably pulled back, with either a high savings rate or a high &quot;optional spending&quot; rate, then you should be in far better shape to adapt - and I&#x27;ll suggest that using some of those resources to help others around you would be useful.  Even just coordinating bulk buys of food and other resources is helpful.  But the key here is that this allows for flexibility.  It&#x27;s good to be rich, and all that - so don&#x27;t be stupid about it.<p>I think, collectively, we&#x27;re in for a world of hurt.  Inflation is high, and energy costs seem to be staggering back up.  Europe is going to be a frozen wasteland this winter if it&#x27;s anything but a warm winter, and the energy costs are <i>already</i> eating businesses alive out there.  That&#x27;s before you get to a possibility this winter, in which money doesn&#x27;t help, because there&#x27;s simply no energy to deliver.  If the natural gas pipeline to your place are empty, welp.  Doesn&#x27;t help to be able to afford the energy when there&#x27;s none to buy.<p>That does imply that you might consider some backup energy solutions for the winter.  I&#x27;m a fan of kerosene lately.  Less annoying to use than propane, and stores almost as well.<p>The last couple years have broken a <i>lot</i> of things.  And we&#x27;re only just beginning to learn how much is broken, how badly.