I wouldn’t bet on that. You may get a *temporary* reprieve but retailers will adjust inventories the OTHER direction in short order and then you’ll see shortages and price increases again. 6 months ago every company was bullish and ordering like crazy. Today that’s slowing down and in some cases reversing. Merchandise planners will be ratcheting down orders quite a bit in a lot of categories. Until PPI rolls over, CPI will keep rising, and PPI is running hotter than CPI.
What I am betting on is that prices continue to rise; that the Fed will abandon "tightening" (even though they are still doing QE activities even now) due to political pressure when the recession starts to really bite (especially if it shows up in housing prices), and that "they" will do other [-]idiotic[/-] unwise things like price controls which will only result in greater long term negative impact.
Having said that, there is a limit on how much I can prepare: I am roughly (after this huge downturn) 50% equities, 43.5% fixed, 6.5% commodities. Of the fixed, almost none of it is long term non-inflation adjusted. Most of it is made up of very short term wrap's (in 401k/457 plans), TIPS, or i-Bonds). Of the commodities, some is real (e.g. PM's), some is paper (e.g. ETF's). In the equity portion, I do have some things that might do well in an inflationary environment (stocks like CTVA, FCX), but not nearly enough.
I do recognize that I am losing to inflation on the large S/T cash position, but made the decision a few years ago (somewhat too early), that I did not want to have a large duration risk on bonds that were not inflation adjusted. If the market drops "a lot" some of it will be redeployed to equities and if we get considerably higher rates and a real effort to battle inflation, in longer duration fixed instruments.
I have been steadily increasing (for years and now at an accelerated rate) the % in things like PM's. This has been done sort of using a dollar cost averaging technique as old CD's at higher rates matured. (Pretty much all done on that front so new purchases will need to come from cash or equity sales).
I am fortunate to have a mega-corp pension that I've been drawing since 2009, but unfortunately it is not COLA'd. When I retired I was able to do budget which covered my expenses with it (but was a bit tight). I didn't really live on just the pension, but did follow the budget for a while to ensure that I could if needed. ) That is no longer true: w/a CPI index value of 214.5 in 2009 vs. 289.1 as of April 2022, my pension has lost 34.7% of its purchasing power and on its way to lose a lot more.
However, since that time (at 51 y/o) to now (almost 65) I now have the ability to draw social security (but again with the caveat of it being a program which has a not-so-sure future).
