And the ripple effects will be HUGE

Borepatch points out that Gas (and all other petroleum energy) is gonna skyrocket.

He’s right.

But what he fails to mention is that the cost of energy is part of the cost of nearly everything you own, eat, or otherwise consume.

Food? Trucks, trains, boats and sometimes planes bring your food to your local store. Farmers burn diesel to plant that corn or wheat or soybeans, and to harvest it…and to put on that petroleum based fertilizer that increases their yields. (more yields means a somewhat lower price, just in case you are missing that point). Meat is gonna go up because, as corn goes up, therefore does the price to feed cattle….and it takes fuel to harvest  and haul the hay that is the other staple for cattle…and, of course, to transport those foods to the farm so the cow can eat it, and fuel to transport that cow to the butcher to be cut up into steaks and chops and roasts and burger and shipped to your local supermarket. Those nifty fresh veggies and fruits that you buy in the depths of winter? Yeah, they come from South America on a plane or a fast boat. The ones you get in the summer? They still have to be trucked from the vegetable farm or orchard to the place where you buy them. Still takes oil. Expensive oil.

Consumer goods? Clothes, furniture, rakes, shovels, hammers, blankets, beer, smokes, pet food, milk, etc. All get to you using petroleum. and some are made from plastics, also made from petroleum feedstock…..

The raw materials that make your homes? Yeah, hauled to your local Home Depot using trains and then a truck. That drywall takes a LOT of energy to make, so does that plywood. And that carpet is likely made from Rayon or Nylon. Guess where that comes from?

Paper? Guess.  Tires? Yeah, same thing.

Automobiles? Yeah, they take a lot of petroleum to bring the parts to the factory…..and a lot of the plastic parts that make the car lighter and safer…..yeah, you guessed it.

Think about it. If energy (oil) goes up in price, then so will the cost of EVERYTHING.

Expect your food prices to go up by 25% MINIMUM. Consumer goods? Same thing.
Autos? Fuggeddaboutit. (and yer not gonna be able to afford to drive anyway, as all yer cash is gonna go for food….)

Think I am crazy? Maybe I am. But it happened in Britain in the ’70’s when their currency went to shit when the socialists destroyed the Pound…and Britain as we knew it…and Argentina when the socialists did a similar thing in the late 80’s…Same tune….. just a different language. The price of everything went insane. They were both productive prosperous countries…now they are second raters in decline.

Wanna live in Greece? No big deal, just wait a year or two. Especially if we re-elect the Socialist in Chief for another 4 years. Inflation will be rampant, and the cost of a gallon of gas will likely be $7.50 or more. It’ll be just like Greece, without the lamb dishes and the wild taxi drivers and the lovely seashore and the hirsute women. 

It isn’t the oil that is going up, it is that the dollar is worth less. And it will be with those worth-less dollars that you will pay your fuel bill, and try to purchase your food and other goods…especially those that you buy from other countries. It’s gonna take a LOT of those worth-less dollars to buy things from foreigners…or from your neighbor.

The dollars we use today are just paper…just an easy medium of exchange. The fact that there are many more of them means that each dollar is worth less than it was a year or two before. They have no intrinsic value, just paper “backed by the full faith and credit of the United States’. Which is rapidly becoming worthless. We have maxed out our credit, as a country as we print worthless paper dollars to pay our bills……and when our ability to buy energy fails, because our ability to generate credit to back our paper currency ceases or becomes less, then we, as a nation, will starve. Our wealth is not the stacks of dollar bills we print, but the productivity of our citizens balanced against our expenditures…and that ratio is not a good one lately.

What to do? Plan. What to plan for, and how to implement those plans is up to you. But expect less commerce, and expect food to be costly, as well as consumer goods. Expect less…you won’t be disappointed.

But when the decline accelerates (it has already begun) you’d better have a plan to feed yourself and your family. It’s gonna be ugly. Argentina is the most recent example. Read “Surviving in Argentina” to get an idea of what is coming. Look to Greece for an example.

It’ll be us in a year or three, no matter who is in the White House. It can be worse or just bad, but it ain’t gonna be good either way.

One thought on “And the ripple effects will be HUGE

  1. Geez, I hate it when people pull the curtain back so far.
    Add a cut to entitlement payments and we've got an event.

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