"the backbone of our economy runs on diesel:"
– ~80% of US freight by weight
– ~80% of global trade moves by sea
– Most farming
– Most mining
The obvious inflationary pressures are already manifest in every part of our supply daisy chain and will continue to put upward pressure on prices across the board causing demand destruction in all products and services. The overlap is impossible to avoid since even services not directly connected to delivery system inflation are also affected causing them to have to raise prices. Have you looked at Insurance rates lately?
"Home insurance premiums just jumped 22% for many of us, while inflation only grew 2.69%. That's not normal—and it's not sustainable for families already stretched thin.
I started a petition because insurance companies are raising rates far faster than actual costs justify, and renters and homeowners are paying the price. When your mortgage is locked in but your insurance keeps climbing, something is broken. Families are having to choose between keeping coverage and paying rent. That shouldn't be how this works."
Ok, the part that says "inflation only grew 2.69%" is complete and utter BS. We all know better! My point is that inflated prices on critical materials are affecting EVERYTHING we pay for. The only thing not going up is our income which is more evidence that we are deep inside a condition called "stagflation" which is where prices rise while incomes stagnate. This will affect every. Single. Business owner. Without exception in ways I can only speculate about. I certainly expect the level of consumer purchasing will drop as everyone pulls back and makes the necessary adjustments.
The gap between what most folks earn and the cost needed to maintain their current lifestyle is widening very quickly and the cost of Diesel fuel ties into that directly because it affects most of things people buy. I'm sure our country's leaders are spending sleepless nights searching for solutions.
To be fair, there's not a lot that can be done to mitigate rising costs since most of the increases are already baked in the cake. The media reports tend to emphasize the positives which are becoming fewer and farther in between like the (heavily manipulated) stock market hitting new all-time highs. Even that is rolling over as new, shiny IPO'S such as SpaceX are now discovering.
For the rest of us, there's life outside the stock market bubble and the insiders who benefit from the manipulation.
"As part of its huge data release today, the Bureau of Economic Analysis also released the quarterly inflation data across the GDP accounts. These are price changes in all goods and services that all participants in the US economy purchase: consumers, businesses, and governments. These inflation rates are far broader than the consumer-price inflation rates of CPI and the PCE price index. All GDP data are quarterly, which irons out some of the wild month-to-month squiggles of monthly data. And in inflation in Q2 was really bad – even when excluding energy."
The cost of Diesel fuel has already killed the Canary in the coal mine and now the cascading price increases will start steamrolling into every aspect of daily life from groceries to computer chips. It's all connected you see and small business owners are getting it from all sides; increased costs and reduced demand. Unfortunately, I expect this condition to continue for a number of reasons not least of which is the fact that our leadership is straight up making things far worse through unbelievably short sighted policies that almost look like sabotage to me at this point. Interest rates have remained subdued simply because the government needs to sell a butt-ton of new debt just to refinance the Treasury bonds coming due. Here's the thing about that; the Treasuries expiring are all at near-zero percent interest while the Fed issues new 10-year bonds at 4.7%. Imagine where interest rates would be if they didn't need to issue so much debt!
My point is that interest rates are being purposefully held down as much as possible much like the price of Oil in the futures markets to create the illusion that things aren't that bad. Once that manipulation is gone, the resulting flood of pent-up pressure will move like a tsunami through the economy and our lives. My advice is to secure any financing needed for your business before November simply because that's where I believe the incentives to maintain costly manipulation will no longer matter. The elections will be a turning point regardless of the political result. The battle will be fierce but reality and math always prevail. Always.
Here are some interesting articles I saw this week:
"As Trump considered his military options for forcibly reopening that crucial waterway, he discovered that none of them were viable. Over the previous decade, we had invested more than two trillion dollars in our navy, with one of its most important missions being maintaining the security of the Persian Gulf waters, but it proved totally useless at that task."
"Overall inflation in GDP (“GDP deflator”), which tracks inflation in the entire economy, soared by 6.3% in Q2 from Q1 annualized, the worst since Q2 2022"
"Financial gravity finally caught up with SpaceX, and we will soon see just how hard the landing might ultimately become."
"So no, the doomsday crowd wasn't crazy. It was just math. If all you looked at was the supply gap, it really did point to $200 oil."
After everything we went through during the 2020-2023 COVID madness this is the exclamation point:
