Diesel fuel shortages could lead to a global economic crisis within months
Global diesel fuel shortages are rapidly emerging, and most in the western world are yet to recognise the catastrophic potential. What are the implications of worsening diesel fuel shortages?
Diesel quite literally fuels the global economy. Without it, the economy comes to a standstill.
As you read this article, just about everything in front of you required a truck, which required diesel, to get there.
Diesel fuel prices are already breaking out in just about every region on earth. It’s likely this is just the beginning of an extended period of extreme diesel prices.
Food Inflation Is Still High Around the World
In real terms, food price inflation exceeded overall inflation in 81% from 162 countries where data is available, the World Bank said in its latest food security update.
[Bloomberg]
India’s dream of green energy runs into the reality of coal
The biggest obstacle, however, is the lack of power storage. While coal plants can run 24 hours a day, the intermittent supply of solar and wind means it must be stored in batteries in order to provide continuous power.
While India’s National Electricity Plan expects the country will build enough storage by 2027 to avoid adding yet more coal plants to its pipeline, battery technology is prohibitively expensive and authorities are considering new subsidy schemes to bring down prices.
“[For] as long as we don’t have low-cost storage available, we need to have base power, and base power has to come from coal,” says Dhal, Odisha’s energy secretary.
[Financial Times]
Credit card losses are rising at the fastest pace since the Great Financial Crisis
Credit card companies are racking up losses at the fastest pace in almost 30 years, outside of the Great Financial Crisis, according to Goldman Sachs.
Credit card losses bottomed in September 2021, and while initial increases were likely reversals from stimulus, they have been rapidly rising since the first quarter of 2022. Since that time, it’s an increasing rate of losses only seen in recent history during the recession of 2008.
It is far from over, the firm predicts.
Banking regulator Sam Woods: ‘This is the most intense period since the 2008 financial crisis’
…he has two areas of concern right now: commercial property – where demand has declined amid the rise in remote working – and the downturn in China’s property market. “But if experience tells me one thing, it’s that the things you name are probably not the ones that blow.”
E
CB Must Not Test Economy Until It Breaks, Villeroy Says
Data later in the day showed only a marginal improvement in the business outlook in Germany, whose economy is expected to shrink this quarter. Clemens Fuest, who heads the Ifo institute that compiles the data, said sentiment “remains bleak.”
[Bloomberg]
Fifty years ago the energy crisis officially began, and it hasn’t ended
Weil is less optimistic, a half-century later.
“The difference now,” he said, “is we know what the problem is but we’re still very dependent on hydrocarbons. We just don’t have sufficient willingness to do what’s necessary.”
Germany went from envy of the world to the worst-performing major developed economy. What happened?
Now, Germany is the world’s worst-performing major developed economy, with both the International Monetary Fund and European Union expecting it to shrink this year.
https://apnews.com/article/germany-economy-energy-crisis-russia-8a00eebbfab3f20c5c66b1cd85ae84ed
Will Asia’s food shortages be exacerbated by new Global Biofuels Alliance, with crops diverted?
But analysts say that using more biofuels may result in the diversion of crops like sugar cane and rice for fuel, which could exacerbate food shortages and lead to more deforestation.
“This is coupled with the fact that burning biomass is a false solution to the climate crisis, since the urgency of this crisis means that there is not the time for these forests to grow back and absorb the carbon emitted from burning them,” he said.
Forests need to remain as carbon sinks rather than be degraded by industrial activities, he said.
“The scale and intensity of the biomass industry is such that forests come under threat both to directly being logged to feed biomass plants and to make way for palm oil and other crops to supply the industry,” Robertson added.
[South China Morning Post]
China Developers Drop Most in 9 Months on Evergrande Woes
Officials are rushing to stem the spillover from China’s property turmoil. Fears are mounting that the years-long crisis will next hit the nation’s commercial banks and keep home prices under pressure, further hurting consumer confidence. With the country being the world’s biggest consumer of iron ore, the sector’s downturn has already hurt the commodity market as construction companies pulled back from restocking before the holiday.
Interest rates may be over, but trouble lies ahead
It is certainly possible that rate hikes may be finished. But while inflation is currently falling in most developed countries, there is every chance that it may still persist in the face of rising energy prices.
Saudi Arabia and Russia have indicated that they want to push global oil prices to $100, with the Brent oil price in Europe up nearly 31% over the last few months. These energy price increases are already noticeable in the motor oil inflation numbers in August, and it seems likely that they will become more pronounced in the coming weeks.
https://unherd.com/thepost/interest-rate-hikes-may-be-over-but-trouble-lies-ahead/
US debt interest payments are unsustainable and flash ‘huge warning signs’ as they take over federal spending, budget expert warns
- The trajectory of US debt interest payments is not sustainable, Maya MacGuineas told Insider.
- Interest will eclipse defense spending in four years, the Committee for a Responsible Federal Budget president said.
- By 2051, interest payments will be the single largest federal expenditure, topping Social Security.
https://finance.yahoo.com/news/us-debt-interest-payments-unsustainable-203001849.html
You can read the previous “Economy” thread here. I’ll be back tomorrow with a “Climate” thread.
If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.
https://www.foxbusiness.com/retail/rite-aid-close-hundreds-stores-bankruptcy-report
https://www.thenationalnews.com/opinion/comment/2023/09/24/the-sustainable-development-goals-are-hard-to-achieve-but-we-shouldnt-abandon-them/
https://www.theguardian.com/world/2023/sep/24/costs-delays-and-labour-shortages-threaten-the-osaka-world-expo
Here is 3 stories to add to the list which tell a big story. We can’t build stuff problems. We suck at our goals. Nd everything is going bankrupt
Ooooh, excellent, Heather! Thank you. We wonder when we will go over the edge!
We live in interesting times
Summer is back in France with temperatures up to 7 degrees above normal seasonal levels.
What is special about France is that despite the economic crisis that is fast approaching, the French are saving like ‘madmen’. This is quite exceptional. They have never saved so much before!!! in recent history. The interest rate on savings to good is guaranteed until 2025 and is at 3% That’s a lot.
….. France’s favourite savings product saw another huge inflow in August. Last month, €2.3 billion was deposited in Livret A passbook accounts and €700 million in Livret de Développement Durable et Solidaire (LDDS) passbook accounts. At the end of August, total Livret A deposits amounted to €405 billion and LDDS deposits almost €145 billion.
In the first eight months of the year, net inflows into Livret A and LDDS accounts combined amounted to €40.69 billion. At the current pace, unless there is a massive outflow in the last four months of the year, 2023 is likely to be one of the best deposit years ever.
This remarkable trend is mainly due to inflation, which encourages those who can afford it to build up savings in anticipation of better times. .
In mid-July, Bruno Le Maire announced that the yield would be maintained at 3% until 2025, regardless of inflation trends. “The higher the interest rate on the Livret A, the more expensive the loans. Le Maire does not want to jeopardise the construction of tens of thousands of homes and the development of thousands of small businesses.”……
So that all seems ‘nice’. But when I take a tour of my village here in the mountains, the reality is more stark. Some have been laid off at school, others have had to change jobs and can barely afford the cost of daily transport to and from work.
Diesel and petrol costs are historically high and the government is no longer able to give ‘gifts’.
We are going to see. Everyone is worried should a cold winter unexpectedly turn up here high in the mountains
https://www.lefigaro.fr/conjoncture/livret-a-ldds-en-aout-les-francais-ont-de-nouveau-massivement-epargne-20230921
Yes, we definitely live in “interesting” times, Zip! I wonder if the savings trend is like squirrels who save up food for the winter. Winter in this case meaning “tough times.”
We appreciate your on the ground reporting. Other readers are encouraged to share what it’s like where you live.
Seven degrees above normal—!
Thanks for keeping up the blog, Kali. Here’s a post people here might appreciate.
“Infinite growth on a finite planet is cancer, and this cancer is terminal now. Has been for a while. I hate to be the one to tell ‘ya. Climate change is just a symptom of the all consuming rot. All the ‘renewable’ cures just move the cancerous growth to different organs. The time to cut this thing out was 10,000, 500, maybe 50 years ago, but it’s too late now.”
https://indi.ca/the-death-of-a-civilization/
https://www.salon.com/2023/09/23/think-this-summer-was-bad-it-might-be-the-best-one-you-and-i-will-ever-see/
Here is another one only thing I disagree with is only a million people will nope everything will go!
Seems likely, Heather. Thanks for sharing that.
Spot on, Cassandra. Thanks!
Thanks for keeping up the work!
https://wraltechwire.com/2023/09/22/doomsday-authors-analysis-we-have-destroyed-our-ecosystem-now-we-await-the-collapse-of-civilization/
Wow, Peat! Great post! I particularly appreciate his scenarios of how western countries might collapse. Sh*t is getting real!
What happens when a species overpopulates it’s habitat? We are about to find out & it might not be pleasant.
I realized,in 1964,what the growing pop. could do to the planet when there were around 3.3 billion special vertebrate mammals. I’m in amazement at this species continuing blindness.
OMG – I didnt know about this.
https://www.youtube.com/watch?v=w5Gd_Md3GnM
Brilliant, Republican & Democratic voters elected the people who have brought us to this point. Two party destruction machine?
“Know your enemy.”
It doesn’t matter if we have 8 or 6 extinction periods wasf! The titanic is going down fast.