I was driving to an appointment and noted the prices at every gas station I passed. They were $3.99 up to $4.09. Then I saw one for $3.79. What? That was cheaper gas than I saw last Thursday. I pulled in and filled my tank, even though I only needed 8.5 gallons. I was thrilled to get gas for $3.79.
That’s when I realized what they had done to us. Did you see what I said? “I was thrilled to get gas for $3.79.” I should have been pissed. Instead of being thrilled, I should be furious that prices jumped from $3.20 ten days ago. Instead, I felt lucky.
Will I be “thrilled” to find gas for less than $5 in another week? What about $7 per gallon, or even $10? When does this end?
Yes, I suspect we will see gas reach $7 or more. That’s going to cost me $150 to fill my tank. I remember being disgusted years ago when it first hit $50 for a tank.
When I drove home a few hours later, I saw a station had raised its price to $4.19.
It’s Going to Get Worse
On March 2, I said Russia was dragging us closer to a collapse because of its war in Ukraine. Nothing in the past week has changed my mind. If anything, I’d say our descent has sped up.
In the short-term, we will see more of the same: higher fuel costs, rising food costs, lower stock markets, higher mortgage rates, and a slumping housing market. At some point, the burden of inflation and the angst of a war will tip the country into a recession.
Supply Chain Collapse and Higher Inflation
I predict a colossal supply chain collapse. The rising price of oil and diesel fuel is going to be a driving factor because of its effect on trucking, but shortages caused by disruptions related to the war are going to exacerbate it. I predict the resulting supply chain SNAFU will be worse than it was during COVID.
Rising oil prices and the unbalanced supply chain problems will intensify inflation, pushing us well into the double digits. That’s going to piss people off.
Today, Americans are glued to their screens, watching Ukrainians blow up tanks and shoot down planes. They are willing to trade a dollar at the gas pump to see the Russians get their asses kicked. Survey’s show they want Biden to be tougher on Russia.
That won’t last. Americans have a short attention span. As their bankrolls get small and their retirement accounts shrink, Americans of all economic levels are going to get pissed. When the cost of food doubles, they can’t afford to fill up their tank, have to think twice about going out to dinner, and something they need is back-ordered for five months, that anger is going to be directed at the party in the White House. Unless he sends Seal Team Six to snatch Putin up in a midnight raid like Osama bin Laden, I don’t see this being a win for President Biden.
Potential Global Problems
These domestic problems will be bad, but they are survivable. It’s the global problems and the threat of nuclear war that make everything worse. For example:
World War III Erupts
I see a couple of possible scenarios here:
First, there’s a great deal of political pressure on NATO to implement a no-fly zone. My guess is that some Russian troops will do something despicable and some well-meaning soul will get the UN General Assembly to authorize a no-fly zone. The planes “assigned” to the UN will shoot down Russian planes (or vice versa) and it will spiral into a broader war that ends up being most of Europe against Russia.
Second, Russia gets fed up with weapons and warriors making their way from Poland into Ukraine and start attacking the shipments and blowing up buses. This will result in an attack on Polish territory that drags NATO into a war with Russia. Russia is even more likely to attack Poland if they piss Putin off by transferring their MiG-29 fighters and armaments to Ukraine.
Third, there is an “accidental” attack on American or other NATO forces at sea, in the air, or elsewhere. We respond and end up embroiled in a war with Russia.
Fourth, China sees that the eyes of the world and U.S. resources are on Ukraine and Russia and launches and invasion of Taiwan. While I think this is less likely than scenario 1, I don’t think we can discount it. If war between NATO and Russia breaks out, I think China will leap at the chance to attack Taiwan, knowing the U.S. and UK are otherwise occupied.
Russia Resorts to Nuclear Weapons
If Putin wins the war, he will be a Russian hero. If he loses, it will lead to regime change. It might be a bullet, a poison, a traitor on his security detail, or it could be growing unrest within the country as sanctions bite and anger grows, leading to another Russian Revolution.
If Putin senses that point coming, he will grow desperate. In his mind, he cannot lose. If things go badly, he will stop walking the fine line that keeps the U.S. from engaging him directly and unleash his cyber warriors and his space weapons, culminating in a first strike with his nuclear arsenal. Putin is probably crazy enough to destroy the earth with nuclear bombs rather than lose. The question is: Will those around him allow him to do so?
An Ugly Future
To recap, we’re looking at the possibility of soaring inflation, massive supply chain failures, the threat of World War III on one or two fronts, and the possibility of nuclear war. All because one megalomaniac decided it was his destiny to reunite Ukraine and Russia.
Or, none of this could happen; things in the Ukraine will get resolved and the war will fade from the headlines. Oil prices would then drop, inflation will level off, and we’ll all feel better.
At my house, we’re preparing for the first vision of the future, and praying for the second.
I look forward to reading your site every morning. It has given me food for thought.
We already hve petrol at over $2 per litre, $ 9/gallon now in Australia.
Has that jumped becuase of the war, or has it been that high for some time?
The situation is most definitely going to get worse…..nothing is stopping what is coming.
Prepare now….. Great Depression is here again
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