Anything that runs on petro is about to explode in price due to trumps stupidity.
And its not just gonna be food and manufactured goods, which depend on diesel for harvesting and transporting.
Its gonna be power too. And not just oil and gas plants, but coal, nuclear, wind, etc too… because they all use diesel to get men and materials where they need to be. Not to mention petro-chemical derivatives like grease and plastics.
even raw material extraction is gonna skyrocket, because all those machines also run on diesel.
We’ve used the strategic stockpile to kick the can down the road, but once thats tapped out the significant reduction in oil is gonna hit home, and its gonna hit hard, and shits gonna skyrocket across the board because everything relies on gas and diesel in some form or another.
Your mortgage is a long term concern, being able to afford to eat with price increases due to petro costs rising across the board is the more immediate concern.
Most farming (especially in the US, which is hugelly dependent on hybrid corn, which requires fertilizer since it grows with such a high density of plants that the natural fertility of the soil isn’t enough) uses fertilizer.
So the lack of Oil will hit Food Production upstream from transportation, especially in the US.
even raw material extraction is gonna skyrocket, because all those machines also run on diesel.
Be more forward thinking. A few generations of uranium and lithium mining with pickaxes and oxen drawn wagons will get the world economy up and running again.
We’ve used the strategic stockpile to kick the can down the road, but once thats tapped out the significant reduction in oil is gonna hit home, and its gonna hit hard, and shits gonna skyrocket across the board because everything relies on gas and diesel in some form or another.
They’re running low to the point where there are concerns about whether or not the salt caves they’re stored in can ever be used to store oil again:
What kind of food price increase is actually likely though? Food costs fuck all compared to a mortgage. UK prices, I can buy 15-20kg of oats/rice/flour/potatoes for an hour of minimum wage.
Even if food goes up 4x its current price, I will just cut out some of the luxury products like meat. Not like its a massive problem. Potatoes with some rosemary salt, delicious. I grow the rosemary myself, used to do it as guerilla gardening along some foot paths but now I have a small garden.
and if my food costs went up 4x, Theres no amount of cutting I could do that could keep the power and water on, or keep a roof over our head, because not only have I cut all my luxuries out years ago, I’ve cut out a good deal of necessities. Hell, some meals are just meals for eating nutrition, not meals to lvie or thrive with. I’ve cut literally everything and anything I can cut, thats not my own wrists.
I don’t think we’re living in similar tax brackets.
I used to live off £8k just fine. Now on £29k but my increase in spending is just on luxuries I could easily survive without, or goes to savings.
Like I don’t need expensive bags on my bike, I could use 2x Aldi carrier bags and strap a couple of bamboo canes to the panier rack to support them. I used to have a setup close to that and it works pretty well. Isn’t waterproof of course.
I haven’t kept up with the state of things in Britain (I left some years ago), but were I am now (Portugal) it was just recently on the news that credit card debt is the highest it has ever been.
This kind of thing is a signal that people’s finances are tight (read: they have no savings, spending everything they earn), as many people use credit card debt (which, remember, tends to have 20%+ APR interest) for dealing with unexpected large expenses (for example, their fridge stopped working) that they can’t pay for directly from their savings.
From what I remember from the UK, even before Brexit things were getting worse for most people with average real incomes for the lower 90% of the population in economic terms falling at about 1% per year.
From what I’ve been reading it’s the same or even worse in the US.
So, how likely is that the various effects of higher oil prices (not just on food prices but on the prices of pretty much every physical product due to transportation costs as well on the prices of fuel for people who still have ICE cars) will, when a large percentage if not even the majority of people are in a financially tight situation with no significant savings, cascade into all manner of problems, from mortgage defaults to companies going bankrupt (with people losing their jobs) because their revenues went down due to lower sales and their costs went up due to higher fuel prices?
Further, specifically for Britain, never forget that the response of the Government to the 2007 Crash was to support bankers and more broadly asset owners and make most people pay for it via Austerity (something which in turn fed the discontent that gave Leave a victory in the Referendum and thus Brexit).
Absolutelly, people will basically do like you and squeeze little savings here and there, yet when lots of people do that companies’ revenues fall and some will be bankrupt, plus some things (like mortgages and rents) aren’t really flexible (wellm not easilly: sometimes you can downsize but even that has costs) and with the current housing market a lot of people are spending most of their after tax incomes on housing.
Herbgrower, you seem to view the world through a singular lens…
“Covid smovid… I could just make a vinaigrette with some chervil and tarragon, throw that on the little swab they stick in your brain before they test and I’d feel jusr fine, shoot? And I grow that tarragon myself actually…”
“Food is going to be unaffordable”, I proceed to demonstrate just how cheap food is. So far price rises have just been a little bit the previous times things like this have happened. I don’t think there is any credible reason to expect food to go up by as much as some seem to make it sound like.
Just food price increases will mainly hit poorer people in poorer countries more.
Then again the median wealth in the US is less than Portugal - it’s a “rich” country only because a handful of people are stupidly rich, not because most people are - so most Americans are poorer than Brits (which has a median income above Portugal).
You do make a good point though.
As I see it, there are two factors here:
How much will food prices go up: on one side there are a few ways oil price push prices up, mainly increases in fertilizer costs (as most fertilizer is made from oil), farming machinery operation and transportation, whilst on the other side there is some flexibility on the Demand-side (people actually eat more than they need and can eat less) so its not like this is an inflexible market were a small inbalance between Production and Demand can massivelly move prices.
How tight are most people’s finances already. Specifically, how likely it is that there’s a “drop that spilled the glass” effect from higher food prices that mean it cascades into all manner of other things (such as mortgage defaults) because that pushed people over the edge.
Personally I’m more concerned over the latter mainly because wage growth in most of the West hasn’t kept up with inflation, inequality has exploded and most people have been so bad in terms of balance between incomings and outgoings that not only do they have little or no savings but aggregated credit card debt has never been this high.
Seems to me that the way this will explode is likely to be more akin to dominos falling due to various effects from oil prices increase cascading into an ever greater effect because we’re in an Economy where financially most people are already very tight, than due to any one overwhelming effect.
Anything that runs on petro is about to explode in price due to trumps stupidity.
And its not just gonna be food and manufactured goods, which depend on diesel for harvesting and transporting.
Its gonna be power too. And not just oil and gas plants, but coal, nuclear, wind, etc too… because they all use diesel to get men and materials where they need to be. Not to mention petro-chemical derivatives like grease and plastics.
even raw material extraction is gonna skyrocket, because all those machines also run on diesel.
We’ve used the strategic stockpile to kick the can down the road, but once thats tapped out the significant reduction in oil is gonna hit home, and its gonna hit hard, and shits gonna skyrocket across the board because everything relies on gas and diesel in some form or another.
Your mortgage is a long term concern, being able to afford to eat with price increases due to petro costs rising across the board is the more immediate concern.
Most Fertilizer is made from Oil.
Most farming (especially in the US, which is hugelly dependent on hybrid corn, which requires fertilizer since it grows with such a high density of plants that the natural fertility of the soil isn’t enough) uses fertilizer.
So the lack of Oil will hit Food Production upstream from transportation, especially in the US.
Be more forward thinking. A few generations of uranium and lithium mining with pickaxes and oxen drawn wagons will get the world economy up and running again.
They’re running low to the point where there are concerns about whether or not the salt caves they’re stored in can ever be used to store oil again:
What kind of food price increase is actually likely though? Food costs fuck all compared to a mortgage. UK prices, I can buy 15-20kg of oats/rice/flour/potatoes for an hour of minimum wage.
Even if food goes up 4x its current price, I will just cut out some of the luxury products like meat. Not like its a massive problem. Potatoes with some rosemary salt, delicious. I grow the rosemary myself, used to do it as guerilla gardening along some foot paths but now I have a small garden.
and if my food costs went up 4x, Theres no amount of cutting I could do that could keep the power and water on, or keep a roof over our head, because not only have I cut all my luxuries out years ago, I’ve cut out a good deal of necessities. Hell, some meals are just meals for eating nutrition, not meals to lvie or thrive with. I’ve cut literally everything and anything I can cut, thats not my own wrists.
I don’t think we’re living in similar tax brackets.
I used to live off £8k just fine. Now on £29k but my increase in spending is just on luxuries I could easily survive without, or goes to savings.
Like I don’t need expensive bags on my bike, I could use 2x Aldi carrier bags and strap a couple of bamboo canes to the panier rack to support them. I used to have a setup close to that and it works pretty well. Isn’t waterproof of course.
I haven’t kept up with the state of things in Britain (I left some years ago), but were I am now (Portugal) it was just recently on the news that credit card debt is the highest it has ever been.
This kind of thing is a signal that people’s finances are tight (read: they have no savings, spending everything they earn), as many people use credit card debt (which, remember, tends to have 20%+ APR interest) for dealing with unexpected large expenses (for example, their fridge stopped working) that they can’t pay for directly from their savings.
From what I remember from the UK, even before Brexit things were getting worse for most people with average real incomes for the lower 90% of the population in economic terms falling at about 1% per year.
From what I’ve been reading it’s the same or even worse in the US.
So, how likely is that the various effects of higher oil prices (not just on food prices but on the prices of pretty much every physical product due to transportation costs as well on the prices of fuel for people who still have ICE cars) will, when a large percentage if not even the majority of people are in a financially tight situation with no significant savings, cascade into all manner of problems, from mortgage defaults to companies going bankrupt (with people losing their jobs) because their revenues went down due to lower sales and their costs went up due to higher fuel prices?
Further, specifically for Britain, never forget that the response of the Government to the 2007 Crash was to support bankers and more broadly asset owners and make most people pay for it via Austerity (something which in turn fed the discontent that gave Leave a victory in the Referendum and thus Brexit).
Absolutelly, people will basically do like you and squeeze little savings here and there, yet when lots of people do that companies’ revenues fall and some will be bankrupt, plus some things (like mortgages and rents) aren’t really flexible (wellm not easilly: sometimes you can downsize but even that has costs) and with the current housing market a lot of people are spending most of their after tax incomes on housing.
If only we lived in a rational market. There was plenty of toilet paper to go around as well.
Herbgrower, you seem to view the world through a singular lens…
“Covid smovid… I could just make a vinaigrette with some chervil and tarragon, throw that on the little swab they stick in your brain before they test and I’d feel jusr fine, shoot? And I grow that tarragon myself actually…”
“Food is going to be unaffordable”, I proceed to demonstrate just how cheap food is. So far price rises have just been a little bit the previous times things like this have happened. I don’t think there is any credible reason to expect food to go up by as much as some seem to make it sound like.
Just food price increases will mainly hit poorer people in poorer countries more.
Then again the median wealth in the US is less than Portugal - it’s a “rich” country only because a handful of people are stupidly rich, not because most people are - so most Americans are poorer than Brits (which has a median income above Portugal).
You do make a good point though.
As I see it, there are two factors here:
Personally I’m more concerned over the latter mainly because wage growth in most of the West hasn’t kept up with inflation, inequality has exploded and most people have been so bad in terms of balance between incomings and outgoings that not only do they have little or no savings but aggregated credit card debt has never been this high.
Seems to me that the way this will explode is likely to be more akin to dominos falling due to various effects from oil prices increase cascading into an ever greater effect because we’re in an Economy where financially most people are already very tight, than due to any one overwhelming effect.