So now European consumers are going to have an extra mortgage payment every month. Demand destruction via energy inflation will bring a pretty stark recession, and will trickle into the global economy. China and the US have their own problems on top of this.

Keep in mind, gas is something like 70% of the input cost of agricultural products. So food in Europe is going to spiral as well, since either prices have to go up tremendously or production (and thus supply) has to be cut.

It’s going to be a rough year or two.

 

 

Apparently there are insurance caps against price increases of this size. She isn't gonna pay €1248 / mo

47 minutes ago, JohnSnowsHair said:

 

 

Apparently there are insurance caps against price increases of this size. She isn't gonna pay €1248 / mo

Stores have already shut down in England (and elsewhere) over this. But even if it’s insured, that insurance payout has to come from somewhere. It doesn’t just magically materialize and make all the problems go away.

This is economics: there is no free lunch.

So either the insurer is going to go belly up because suddenly they’re liable for a 20X increase in energy costs, the government is going to have to print hundreds of billions for a bailout, the premiums are going to have to increase to cover the massive payout, etc etc.

And that’s just the financial side of things. Regardless of if insurance caps consumer costs, you still have the problem of a gas supply shortage. You still need to input those costs into food.

Yeah, unfortunately there is no magic button to increase supply. Bringing new energy to market takes time. And the sh**libs fight it every step of the way.

Poor sap is trying to save face so bad for all his fails in the Russia thread.

I remember a previous thread that predicted $10 gasoline this summer…….

16 hours ago, TEW said:

Yeah, unfortunately there is no magic button to increase supply. Bringing new energy to market takes time. And the sh**libs fight it every step of the way.

The magic button is labelled "print”

21 hours ago, JohnSnowsHair said:

 

 

Apparently there are insurance caps against price increases of this size. She isn't gonna pay €1248 / mo

Govts will step in.  We are expecting 5-10x increase now this winter in Sweden.  The energy companies are telling small home owners to put an additional $6k away for the winter four months. and that's after they've lowered their thermostats, adjusted energy usage hours, etc.

It isn't going to be super easy but we will make it work.

 

edit: ...and TEW is right, we've already seen plenty of small business owners shutter their doors

6 hours ago, ToastJenkins said:

The magic button is labelled "print”

Riiiight… but while you can print more money supply, you can’t print more energy supply.

To wit:

 

4 hours ago, TEW said:

Riiiight… but while you can print more money supply, you can’t print more energy supply.

Doesnt matter when you can socialize the cost/price

48 minutes ago, TEW said:

To wit:

 

Actual facism…

Sounds like the Defense Production Act. We’ve had companies taken over by the military until they produced parts that the military needed.

 

I’ll give Powell some credit for his conviction. The man is going to purposely tank the global economy until it truly breaks. The biggest question is how the Fed reacts when it does break? Do they immediately retreat into cuts to ZIRP and eventually QE, or are they truly going to try to reset the monetary paradigm?

Just now, TEW said:

I’ll give Powell some credit for his conviction. The man is going to purposely tank the global economy until it truly breaks. The biggest question is how the Fed reacts when it does break? Do they immediately retreat into cuts to ZIRP and eventually QE, or are they truly going to try to reset the monetary paradigm?

LOL. You know the answer. 

SPOILER ALERT: It's the first one

Just now, vikas83 said:

LOL. You know the answer. 

SPOILER ALERT: It's the first one

Obviously that’s my thinking, but he sure is trying to signal the opposite to the markets.

This is fine  

 

 

 

Jamie Dimon really is the man. 

Was this an advert against student loan relief?

3 minutes ago, TEW said:

Was this an advert against student loan relief?

I took it as an advertisement about the importance of teaching basic economics to the next generation.

Energy sector getting crushed today. Barrel of crude at its lowest since before the war.

Anyone still thinking a recession isn't in play?

2 hours ago, DrPhilly said:

Anyone still thinking a recession isn't in play?

In play? 

almost a certainty at this point