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.
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.
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.”
ECB 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.”
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.
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.
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.
You can read the previous “Economy” thread here. I’ll be back tomorrow with a “Climate” thread.
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