Almost everyone has heard about the rapidly growing global energy crisis by now, but most people assume that this crisis will eventually go away because they think that authorities have everything under control. Unfortunately, that is not true at all. This crisis has taken our leaders by surprise, and now many of them have shifted into panic mode because they realize that there will be no easy fixes. Decades of neglect and foolish decisions have brought us to the precipice of a nightmare, and many of us are going to be absolutely astonished by some of the things that happen in the months ahead.
Here in the United States, we have neglected to properly invest in our power grids for a very long time, and now they are at a breaking point.
We are being warned that there could be widespread “rolling blackouts” this summer, and the situation is particularly dire in Midwest states such as Michigan…
The Lansing Board of Water and Light, or BWL, warned in a press release on Tuesday that the company is preparing for potential ‘rolling black-outs’ this summer.
The Mid-Continent Independent System Operator, or MISO, is Michigan’s power grid regulator. MISO will have to ‘load-shed’ if they see expected energy shortages during peak usage times due to hot weather. Load-shedding is purposefully shutting down electric power in some areas of a power-distribution system to prevent the entire system from failing when it is strained by high demand.
Meanwhile, the price of gasoline is likely to continue to go up.
For quite some time, the amount of oil that is being produced around the world each day has been lower than the amount of oil that is being used around the world each day, and as a result supplies have been getting tighter and tighter…
Fast forward to today, and where are we? Intrinsic demand is thought to be around 103 million barrels a day now, owing to 1% per year global population growth, plus increased wealth–and demand should keep growing at roughly that pace. But supplies aren’t nearly keeping up. We’re currently producing around 100.6 million barrels (reflecting the loss of about a million barrels from Russia), and the resulting spike in prices is already constraining demand to around 101 million barrels, according to Majcher.
When demand is greater than supply, either prices go up or eventually you have shortages.
And sometimes both things happen.
Bank of America is telling us that oil inventories have reached a “dangerously low point”, and until that changes prices are likely to continue to rise…
The result is a market that for the second straight year is under-supplied, and drawing down inventories as a result–on top of the drawdown in strategic reserves approved by political leaders to try and lower prices. Bank of America is already warning that global oil inventories have fallen to a “dangerously low point,” with certain gasoline and diesel supplies in particular at “precarious levels” as we head into peak U.S. driving season. U.S. oil inventories are already 14% below their five-year average, BofA notes, while distillates (like diesel) are 22% below.
I wish that I could tell you that there is hope that things will turn around eventually.
But at this point the CEO of Exxon is actually warning us to expect “up to five years of turbulent oil markets”…
Consumers must be prepared to endure up to five years of turbulent oil markets, the head of ExxonMobil said Tuesday, citing under-investment and the coronavirus pandemic.
Energy markets have been roiled by the Ukraine war as Russia has reduced some exports and faced sanctions while Europe has announced plans to wean itself off dependency on Russian fossil fuels in coming years.
If you think that things are bad now, just wait until you see what happens after a major war erupts in the Middle East.
Then things will really start getting crazy.
Speaking of war, over in Europe a looming natural gas shortage due to the war in Ukraine is likely to cause immense economic problems in the months ahead.
Now that Russia has significantly reduced the flow of natural gas to Germany, it looks like the Germans will soon be forced to ration it, and the Wall Street Journal is telling us that authorities expect “a gas shortage by December”…
The German government moved closer to rationing natural gas on Thursday after Russia cut deliveries to the country last week in an escalation of the economic war triggered by Moscow’s invasion of Ukraine.
Berlin triggered the second of its three-step plan to deal with gas shortages after the Kremlin-controlled energy giant Gazprom, the country’s biggest gas exporter, throttled delivery via the Nordstream pipeline by around 60% last week. Germany’s gas reserves are at 58% capacity, and the government now expects a gas shortage by December if supplies don’t pick up, Economy Minister Robert Habeck said.
It would be difficult for me to overstate the seriousness of this problem. Energy prices have already gone completely nuts in Europe, and one German official is actually comparing this crisis to the collapse of Lehman Brothers…
With energy suppliers piling up losses by being forced to cover volumes at high prices, there’s a danger of a spillover effect for local utilities and their customers, including consumers and businesses, Economy Minister Robert Habeck said Thursday after raising the country’s gas risk level to the second-highest “alarm” phase.
“If this minus gets so big that they can’t carry it anymore, the whole market is in danger of collapsing at some point,” Habeck said at a news conference in Berlin, “so a Lehman effect in the energy system.”
Needless to say, it isn’t just Germany that is being affected…
The crisis has spilled far beyond Germany, with 12 European Union member states affected and 10 issuing an early warning under gas security regulation, Frans Timmermans, the European Union’s climate chief, said in a speech to the European Parliament.
“The risk of a full gas disruption is now more real than ever before,” he said. “All this is part of Russia’s strategy to undermine our unity.”
If the war in Ukraine could be brought to a peaceful resolution, that would greatly help matters.
But we all know that isn’t going to happen any time soon.
On top of everything else, global supplies of diesel fuel get squeezed a little bit more with each passing day. The price of diesel fuel is 75 percent higher than it was a year ago, and here in the United States we have been warned that the Northeast “is quietly running out of diesel”…
The upward pressure on diesel and jet fuel prices in particular is getting attention in the White House, Amrita Sen of Energy Aspects told Squawk Box yesterday. Diesel prices are up a whopping 75% from a year ago, and the spread between diesel and gasoline prices has also widened considerably. The high cost is creating huge strains on truckers and the supply chain; the Northeast “is quietly running out of diesel,” FreightWaves warned two weeks ago.
Even though there could be a historic supply crunch, we won’t completely run out of diesel fuel.
However, as I detailed in an article that has gone extremely viral, we are potentially facing really severe shortages of both diesel exhaust fluid and diesel engine oil if solutions cannot be found.
Urea is required to produce diesel exhaust fluid, and the U.S. doesn’t produce enough. We are normally one of the largest importers of urea in the entire world, and Russia and China are two of the largest exporters. Our leaders have decided that we don’t want urea from Russia, and China has restricted exports.
So that puts us in a really tough position. If you have a diesel vehicle, I would highly recommend stocking up on diesel exhaust fluid while you still can.
As for diesel engine oil, there are several key additives that are in short supply right now due to major problems at several manufacturers. An article that Mike Adams just posted goes into the details. This is a very serious situation that is not going to be resolved any time in the near future.
The bottom line is that supplies of diesel fuel are going to get very tight, and there may be times when diesel exhaust fluid and diesel engine oil are not available at all.
All three are required in order for diesel vehicles to operate, and as I explained yesterday, the U.S. economy runs on diesel.
If we were suddenly unable to use our diesel vehicles, all of our supply chains would collapse and we would no longer have a functioning economy.
So hopefully our leaders are working really hard to find some solutions.
Because it looks like this summer could be quite difficult, and the outlook for the months beyond is even less promising.
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Article cross-posted from The Economic Collapse Blog.
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Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
Any law repugnant to the Constitution can be ignored and anybody that pushes it as law can be arrested or jailed but you are determined the boys up there have a better idea.
The white house clown obstinately refuses to do anything that would improve the situation…