A Fed president just admitted the crises aren’t going away. Look at what the last “temporary” emergency took from you, and never gave back, before you believe anything they tell you about this one.
On August 19, in Your Dollar Is About to Lose Half Its Buying Power, we said the thing most financial media won’t. Inflation dropping from 9 percent to 3.4 percent does not mean prices came back down. It means they are still going up, just more slowly than at the peak of the surge. Three weeks ago, in Bond Yields Soar as Global Panic Builds, we pointed out that core PCE, the gauge built specifically to strip out food and energy, had been stuck around 3.3 to 3.4 percent for months.
The price shock was already spreading into everything else, and nobody in the media or in Washington wanted to say so. This week, a Fed president let the cat out of the bag.
On Monday, Chicago Fed President Austan Goolsbee warned that supply shocks have become more frequent and longer-lasting, and that the Fed can no longer wave them off as temporary. If those price pressures keep spreading, he said, the central bank will have to tighten anyway, and the cost could be lost jobs, falling wages and slower growth. The Fed had already raised rates the Wednesday before, its first hike in three years, and signaled more could come this year. The next morning, Rabobank strategist Michael Every published a note arguing that these shocks are now the norm, not short-lived oddities, and that things will likely get much worse before they get better.
Put those two statements together. The people who run the money are telling you, on the record, that the emergency is the new baseline and that the cure will hurt you. Every time we have been told an emergency was temporary, the thing taken from us during it never came back. There is no reason to believe this time will be different.
Temporary
The “Temporary” Emergencies That Never Went Away
“Nothing is so permanent as a temporary government program.” Milton Friedman
1799227 years
Britain’s income tax, to fight Napoleon
Sold asA temporary tax to pay for the war with France.
Still hereCollected every year since 1842, and Parliament still has to renew it annually because on paper it’s still “temporary.”
1898108 years
The phone tax for the Spanish-American War
Sold asA temporary luxury tax on the rich to pay for a war that lasted about eight months.
What happenedBrought back for war after war. Long-distance calls weren’t freed until 2006, and it still applies to local-only phone service.
1917109 years
Canada’s “Income War Tax”
Sold asA temporary measure to pay for World War I, to be reviewed after the war.
Still hereNow the federal government’s largest source of revenue. The original act ran about 11 pages. The law now runs past 3,000.
194383 years
Tax taken out of your paycheck before you see it
Sold asA World War II measure to raise cash fast. One senator called it the way to get the most money with the fewest complaints.
Still hereMilton Friedman helped design it and spent the rest of his life regretting that it outlived the war.
200125 years
The 9/11 war authorization
Sold asForce against al-Qaeda and the Taliban, passed three days after the attacks.
Still hereUsed to justify operations in at least 19 countries, against groups that didn’t exist in 2001. It is still in force today.
2020Still gone
COVID ends the 24-hour country
Sold asWalmart closed at 11 p.m. “until further notice” to restock and sanitize.
What happenedNo 24-hour Walmart six years later. In 2023, CVS also cut or shifted hours at about two-thirds of its roughly 9,000 pharmacies.
2020–26Never reversed
Pandemic prices: +29% and they never came down
Sold as“Transitory” supply-chain inflation.
What happenedCPI went from 258.7 in Feb. 2020 to 333.9 in July 2026. The Kansas City Fed found corporate markups could account for more than half of 2021’s inflation.
2026Still climbing
The Iran war: Gas up like a rocket, down like a feather
What happenedGas was $2.94 before the war. Oil fell back near prewar levels by July, but gas stayed at $3.78. The St. Louis Fed estimated about six months for it to come back down.
Today$4.48 national average. Diesel is $6.53.
Prices Went Up in the Crisis. They Never Came Down.
In February 2020, the month before the COVID lockdowns, the Consumer Price Index stood at 258.678. In July 2026 it was 333.918. That is about 29 percent higher. If your household spent $1,000 a month on groceries, gas, utilities and the rest of the basket before COVID, the same life now costs about $1,290. That is $3,480 a year more for exactly the same things, and very few paychecks got a 29 percent raise to cover it.
The official line is that this was all supply chains, stimulus and bad luck. The Kansas City Fed looked at it and found something else. Its economists found that corporate markups grew 3.4 percent in 2021 while inflation ran 5.8 percent, which suggests markups could account for more than half of that year’s inflation.
The same economists offer an explanation that is supposed to reassure you. They say the timing and pattern fit firms raising prices in anticipation of future cost increases, not a jump in monopoly power. A follow-up found the profit contribution faded in 2022 as actual costs caught up.
That is supposed to make it okay. Look at what it actually describes. Companies raised your prices first, on the expectation of costs that had not arrived yet, and the crisis gave them the story to do it. When the costs showed up later, the higher price was already the floor. You paid in advance for a fear, and the fear became the new baseline. It doesn’t matter whether economists call that monopoly power or anticipatory pricing, because the receipt in your hand is the same either way.
The whole thing Is Rigged to Go One Direction
The St. Louis Fed published the cleanest proof of this in August, and it comes straight out of this year’s war.
On February 27, the day before the U.S. conflict with Iran began, a barrel of West Texas Intermediate cost $66.96. One week later it was $90.77. Gasoline, which averaged $2.94 on February 23, passed $3.50 within two weeks.
That is the rocket. Here is the feather. After a ceasefire and a preliminary U.S.-Iran agreement in June, oil fell to $69.60 by July 6, nearly back to its prewar level. Gasoline was still $3.78. The Fed’s own model says that even if oil had returned to prewar levels by July 20 and stayed there, it would have taken about six months for gas to fall within 25 cents of where it started. Among the reasons it gives: stations have market power, raise prices fast to protect margins, and lower them slowly because customers get used to the higher price.
Six months. For a price that jumped in two weeks.
Then the fighting resumed, and the feather never finished falling. On September 21, regular gasoline averaged $4.478 a gallon nationally, and on-highway diesel averaged $6.529, about $2.78 above a year earlier. Since the week before the war, that is roughly $1.54 more per gallon of gas. For a driver putting 20 gallons in the tank each week, that works out to about $31 a week, or roughly $1,600 a year, before you count what diesel does to every truckload of food on the shelf.
Segundo Regalado knows the number without needing a Fed model. Local station 8 News Now found him fueling up at a Chevron on Lake Mead Boulevard in North Las Vegas where regular was $5.59 a gallon. He said filling up now runs him “a bit over a hundred dollars” every week. That’s more than $400 a month just to keep one vehicle moving so he can get to work, in a valley where the bus doesn’t cover the shift you actually have.
Now Look at What They Are Actually Asking For
Go back to what Goolsbee said. The supply shock raises your prices. The Fed’s answer is to tighten, which raises your credit card rate, your car loan and your adjustable mortgage, and which Goolsbee himself says could cost jobs and wages. You get hit by the shock and then you get hit by the cure. The Fed’s own official now mocks the old excuse, describing supply shocks as “traaaaansitory” ones that drag on.
Every asks the obvious question in his note. What does a quarter-point hike do about oil tanker rates running 30 to 40 times normal, besides squeeze the homeowner and the small business already paying for those tanker rates at the pump? He answers it himself: nothing good, only bad choices. Then he reminds readers that central banks were created in the first place to finance governments at war, with the Bank of England built to fund the fight against Napoleon.
And watch where the energy policy is heading. Every notes that Republicans are calling to halt diesel exports, and he floats the idea of using the Defense Production Act to “manage” refineries inside a closed trading bloc, where some people get much lower energy prices and others get much higher ones. The question for you is which side of that line your kitchen, your commute and your electric bill end up on. Nobody running this is going to ask you.
I’ve read 1984. Oceania is always at war with somebody, the rations always get cut, and the ministry always announces the cut as an increase. The permanent emergency isn’t a malfunction of that system. It is how that system runs. When a Fed president and a bank strategist both tell you in the same week that the shocks are permanent, believe them.
The Emergency Ends. The Changes Don’t.
The disappearance of the 24-hour store is bigger than Walmart. COVID gave retailers, pharmacies and other businesses a reason to slash overnight operations almost overnight, and in a lot of places those hours simply never came back. Walmart’s “until further notice” became the operating model. Pharmacies cut hours. Grocery stores shortened schedules. Businesses that had spent decades competing on convenience discovered that customers would eventually adjust to less of it.
And this isn’t something that started with COVID.
Go back to the 2008 oil crisis. American Airlines introduced a $15 fee for the first checked bag while oil was around $125 a barrel, saying soaring fuel expenses were threatening the economics of the airline. It was a radical move at the time because checking a bag had traditionally been included with the ticket.
Oil eventually crashed. The baggage fee didn’t.
As of 2026, American charges as much as $45 online or $50 at the airport for the first checked bag on many U.S. itineraries. A fee introduced during a fuel emergency didn’t disappear when the emergency did. Instead, the rest of the industry learned from it and baggage charges became part of flying.
COVID produced the same kind of permanent shift in banking. Bank branches had already been declining before 2020, but the Federal Reserve found that branches closed at record rates during the pandemic and specifically warned that COVID could accelerate a “permanent shift” in how Americans access financial services. The number of bank and credit-union branches fell from 92,418 at the end of 2019 to 88,926 by the end of 2021.
Restaurants offer an even cleaner example because nobody has to speculate about whether the change was supposed to be temporary. New York City created an emergency outdoor dining program during COVID so restaurants could stay alive when indoor dining was restricted. In 2023, the city passed a law turning the temporary emergency program into a permanent part of New York’s streets. City officials literally described it as taking the pandemic program and making it permanent. Whether you like outdoor dining or hate it isn’t really the point. The emergency changed the rules, people adapted to the new rules, and eventually the temporary arrangement became the new normal.
You can see it in smaller things too. Contactless card payments exploded during COVID, rising from 1.6 billion transactions in 2019 to 3.7 billion in 2020 according to the Federal Reserve. The same combination of COVID and new payment technology helped push tipping prompts into places where Americans historically weren’t being asked for tips. Harvard Business School researchers have specifically tied the change in tipping customs to the pandemic and the spread of digital point-of-sale systems. The masks disappeared. The plexiglass mostly disappeared. The screen asking you for a tip didn’t.
Hotels did something similar. During COVID, automatic daily housekeeping disappeared at many properties under the banner of limiting contact between employees and guests. Years later, that old expectation still hasn’t completely returned. Hilton’s current policy, for example, provides housekeeping only every other day at a number of its U.S. focused-service brands unless additional service is requested. Something that would have looked like a service cut in 2019 became normal after 2020.
And if you want the older version of the same story, look at what happened after September 11. The USA PATRIOT Act contained numerous surveillance provisions specifically written with expiration dates. Congressional Research Service records show that 16 sections were scheduled to sunset; when Congress reauthorized the law, 14 of those 16 were made permanent while two received new expiration dates. The emergency legislation didn’t simply vanish when the immediate crisis passed.
That doesn’t mean every permanent change that comes out of a crisis is automatically bad, and it doesn’t require some grand conspiracy where everybody sits around a table planning how to screw you. The incentive is much simpler than that.
A crisis gives governments and corporations permission to change things quickly. The public tolerates things during an emergency that would have caused an uproar six months earlier. Then everyone adapts. Businesses restructure around the lower staffing level, the new fee or the reduced service. Governments build agencies and regulations around the new authority. Years pass, and eventually people forget that things ever worked differently.
- First it is an emergency measure.
- Then it is “until further notice.”
- Then it is just the way things are.
How to Prep for What Is Coming
The failure mode here isn’t one big collapse. It’s a ratchet: each shock takes something, and nothing gets returned. So the goal is to buy, store and learn things now, before the next click, and to depend less on the systems that just told you they plan to squeeze you.
Cash, and kill the variable-rate debt
The Fed’s cure lands first on anything with a floating rate. Credit cards, HELOCs and adjustable loans get more expensive automatically every time they hike, and Goolsbee just told you more hikes are on the table. Pay those down before you do anything else. At the same time, keep physical cash at home. When prices jump overnight, or a card system hiccups at the pump, cash is what lets you act instead of waiting. We laid out the rate side in Bond Yields Soar as Global Panic Builds, and the income side, which matters if the “cost in jobs” part of Goolsbee’s warning comes true, in Job Loss Is the Most Likely SHTF Event You’ll Ever Face.
Fuel and power
The St. Louis Fed just told you gas takes about six months to fall even when oil cooperates. That’s six months of paying the spike price for every trip. Keep a rotated reserve of stabilized fuel so you aren’t forced to fill up on the worst day of a spike, and plan your driving so a price jump doesn’t wreck your week. Anything you can take off the grid is something the next energy shock can’t reprice on you. The entry point is Cheap Off-Grid Power: Real Solar Setups Under $1,000.
Food, bought ahead of the curve
Diesel is inside the price of every calorie that rides a truck to your grocery store, and it’s over $6.50 a gallon. Buy what your family actually eats, buy it before the next round of increases shows up on the shelf, and rotate it. Staples bought today at today’s price are a hedge the Fed can’t touch. Start with Long-Term Food Storage: What Actually Lasts 25 Years, then read Fat Storage Is the Biggest Problem in Long-Term Food so your oils don’t go rancid on the shelf.
Medications
Your pharmacy now closes at 7, maybe earlier on weekends, and the one that stayed open all night probably doesn’t anymore. Don’t let a closed counter become a medical emergency. Ask your doctor about 90-day supplies, refill early, and keep a real first aid and OTC stock at home for the problems that always seem to show up after dark. We cover how to plan for the household you actually have in Most Prepping Plans Assume You Are Healthy and Alone.
Community
A ratchet is a lot easier to take when you aren’t taking it alone. Carpool with the neighbor who works your shift. Split bulk buys. Know who has a truck, who can fix a pump, who can watch the kids when your hours change. That isn’t a bunker full of strangers, it’s the people already on your street. Here’s how to start: Prepper Communities: Building a Survival Network in Troubled Times.
Skills and an offline library
Every repair you can do yourself is a service nobody can raise the price on, close early or cut back “until further notice.” Small engines, basic plumbing, food preservation, sewing: none of it gets more expensive when the Fed hikes. Build a reference library that doesn’t depend on a subscription or a signal. Books don’t need power and don’t change their terms of service. Start with Offline Knowledge Hubs: Building Your Own Digital Survival Library, then fill the shelf from Best Survival Books and Ebooks for Survivalists. The whole point is depending less on systems that treat you as the resource, which is exactly what we warned about in They Built the Matrix, We Walked In.