Hyperinflation is now directly hitting where it hurts the most – our electricity / heating bills.
New York City utility provider Con Edison sent electricity bills to their customers and their customers are seeing 2-3x increase in their utility bill this month.
THE INCREASE IS SO HIGH THAT PEOPLE’S INITIAL REACTION IS THAT 1) IT MUST BE A MISTAKE OR 2) IT MUST BE SOMEONE WHO IS DOING SUPER HIGH ELECTRICITY CONSUMING ACTIVITIES LIKE BITCOIN MINING
It does not help that ConEd has a very nice bridge chart that shows evolution of EPS improvement in February
However, based on electricity bill agreements for 2023, it looks the the elevated electricity bill could be the new normal – the rate of increase will come down, but IT CERTAINLY WON’T COME BACK DOWN.
FOR EXAMPLE – 2023 AVERAGE RATE BASE IS EXPECTED TO INCREASE BY $1,199 TO $26266
Unfortunately, people are shooting the messenger here – Con Edison is just a messenger – it is buying power on a wholesale market and passes the price onto customers.
Raw materials for energy generation like natural gas, are seeing significant price increases, and now we are starting to bear the cost on a delayed basis.
INFLATION IS HERE – ONE YEAR OF 10% HYPERINFLATION EFFECTIVELY REDUCES BUYING POWERHOUSE OF FIAT CURRENCY BY 10% – REGARDLESS OF WHETHER THE INFLATION RATE DROPS TO 1-2% IN FOLLOWING YEARS.
BUT I DON’T KNOW IF INFLATION RATE DROPS TO 1-2% – I AM AN ASSET GATHER HERE – REAL ASSETS WHOSE VALUES HAVE NOT CAUGHT UP.
*not investment advice
