WAR changes everything!
As the price of everything has been rising this one issue has been sitting with me for a bit. And now that the excursion in the sand is impacting everything's price. I need to get it off my chest.
How bad could it get if oil continues to be restricted?
The IMF Warns Of Potential Global Recession Amid High Oil Prices. History has three prior oil shocks, to view as an example of the global impact. Those shocks were only 7-11%, this current Oil impact is between 25-31%. Which as far as my third grade math abilities is order of magnitude larger and thus I would expect more a global impact. The EU has reported they only have a few weeks left of Jet Fuel, that would be a major impact to their collective economies. Yes, this the worst energy crisis in decades, but nobody is talking about the long-term knock on impacts.
What happens IF the oil stops flowing for an extended period of time?
Recall from a macro economic standpoint transports (truck, rail, air) are leading economic indicators. Even IF oil prices stabilize between $80-$90 that is still 20-30% above where they were for months prior to the War in the middle east. All of that price pressure will work its way thru the supply chain as price inflation.
How long before the other polar giants (Russia and China) step up and want to forcibly open the straight? How long is that time frame? 3months, 6months? How long does it take to restore normalcy after a lengthy disruption. I read something it was weeks required for normalization for each one week of disruption.
Another nagging item for me, America's Food Show Obsession and the blowback?
Currently, here in the USA there are two dedicated food channels, plus a high end food show on CBS and one or two shows on FOX, you probably know the Celebrity Chefs. All the TV channels and shows are dedicated to competitions in/around creating food dishes and deserts.
What riles me at this point about these shows is the amount of food waste that is generated when the cooking process goes wrong those ingredients are throw away and they start over with more ingredients. (basic economic supply and demand impact). At what point, do the lower rungs in society have enough and rise up due such as something as food waste? Let's dive deeper as the Straight of Hormuz stays closed the price of fertilizer rises more and more putting down stream price pressure on the entire food supply system. As food prices go up meals are skipped as families and people struggle to survive. Another tactic is less food is bought as the lower rungs struggle. Food stores are reporting more food theft, which is a direct indication there are people really struggling. When do the collective 95% declare enough with the food waste? (i.e. thrown out or not being eaten instead of being eaten) Directly from these competitions they start to demand change. This is part of the War Changes everything part... systems change to meet new demands. I didn't even get to the point this War potentially, spiraling into more major players and the need for food rationing at home to support the War efforts. It happened during previous Wars, it could happen again.
Let's jump into another of our coddled societal excesses, car racing (all forms F1, NASCAR, Drag racing, funny cars, monster trucks, etc.)
I am certain to annoy a lot of people out here pointing out this one. This loyal fan base, will travel across the USA to attend these events (drive, fly or whatever means they use) to sit in a seat and watch American and foreign cars race short tracks, round tracks, curvy tracks. Getting back to today's reality as nations run short of fuel (aka Fuel shock) who determines what is essential and what is non-essential? I am NOT telling anyone how to spend their money nor their time, just pointing out an oddity due shortage time intervals. From a shortage lens this appears to be wasteful, unless the idea is to keep the masses entertained. A modern bread and circuses! Convince me I am wrong.
Summary
War changes lives. War changes systems! My assumption is the American standard of living is being systematically destroyed. That is even before the world demands we make changes. 0I don't have enough brain capacity to make that distinction just yet. Maybe someday perhaps not. Just a couple of American pastimes that are soon to hit the dustbin of history, assuming my theories hold true. WAR changes everything! Including systems and lifestyles!
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