Economic Collapse Blog – American Conservative Movement

A Crippling Shortage of Diesel Fuel Threatens to Devastate Western Economies in 2023

Michael Snyder — Mon, 31 Oct 2022 01:32:52 +0000

In my entire lifetime, global supplies of diesel fuel have never been tighter than they are right now. And that is really bad news, because the entire economy of the western world runs on diesel. If we suddenly had no more diesel fuel, virtually all of our trains, trucks and ships would stop running. Needless to say, just about everything that stocks our store shelves comes to us via trains, trucks and ships. So the fact that there is not enough diesel fuel to go around is a really big deal. Supplies have been declining for months, and at this point diesel inventories have fallen so low that we only have a 25 day buffer remaining…

The U.S. is facing a diesel crunch just as demand is surging ahead of winter — with only 25 days of supply left, according to the Energy Information Administration.

National Economic Council Director Brian Deese told Bloomberg TV that diesel inventories are “unacceptably low” and “all options are on the table” to bolster supply and reduce prices.

Unfortunately, this is not just a problem here in the United States.

Globally, supplies of diesel fuel have fallen to the lowest level that we have seen since 1982…

“The demand for diesel tends to rise as you get close to the winter, because the molecule that makes up diesel is very similar to the molecule that you use for heating homes in the U.S., for winter fuels in Europe,” Tom Kloza, dean of U.S. oil analysts at Oil Price Information Service (OPIS), told Newsweek.

The issue is global, said Kloza, adding that diesel inventories around the world are the lowest as they’ve been since 1982, “and we’ve added about 3.4 billion people in that time.”

Read that last line again.

The total population of the planet has nearly doubled since the early 1980s, and so we truly are in unprecedented territory.

Like I said earlier, I have never seen global supplies of diesel fuel any tighter than they are at this moment.

Of course that doesn’t mean that we are about to totally run out of diesel fuel.

But as supplies get tighter, we are likely to increasingly witness temporary shortages that have the potential to cause immense supply chain headaches…

A shortage of diesel fuel is spreading across the United States, with one company launching an emergency delivery protocol, requesting a 72-hour advance notice from clients to be able to make the delivery.

Per a Bloomberg report, fuel supplier Mansfield Energy wrote in a note to its clients that “conditions are rapidly devolving” and “At times, carriers are having to visit multiple terminals to find supply, which delays deliveries and strains local trucking capacity.”

In a desperate attempt to alleviate the pressure, two tankers that were loaded with diesel and jet fuel that were headed to Europe have been turned back around…

Meanwhile, the scarcity of diesel has prompted traders to start diverting cargoes with the fuel that were originally bound for Europe, Reuters reported earlier this month.

Tanker tracking data showed that at least two tankers with some 90,000 tons of diesel and jet fuel that were initially bound for Europe were diverted toward the U.S. East Coast.

That may help us a bit, but it is not good news at all for the Europeans.

In fact, some areas of Europe have already started to experience very serious shortages of diesel fuel.

Unfortunately, things are not likely to improve much any time soon.

In recent years, politicians in the United States and Europe have made life really difficult for refiners.

As a result, the number of refineries has actually been shrinking, and nobody has really wanted to build any new ones.

Now we get to experience the consequences of their very foolish policies.

At this point, we are being told that the only way to reduce demand for diesel is to have a “significant slowdown in freight movements and manufacturing activity”…

Stabilizing then rebuilding inventories to more comfortable levels will require a significant slowdown in freight movements and manufacturing activity.

There are early indications manufacturing and freight activity peaked in the third quarter of 2022. If confirmed that would take some of the pressure of distillate inventories.

But a deeper and more prolonged slowdown in the United States and/or in Europe and Asia will be needed to boost inventories significantly.

Rebalancing diesel supply will likely require a further rise in interest rates and tighter financial conditions in the United States and other major economies to reduce fuel consumption to more sustainable levels.

In other words, it is going to take a recession and/or a depression in order to fix this crisis.

Ouch.

We should have never allowed things to get this bad.

Over the past decade, we should have been building a lot more refining capacity.

But our politicians didn’t want that, and so now we all get to pay the price.

And thanks to the war in Ukraine, supplies from Russia that could help alleviate this nightmare are not going to be available.

So there will be shortages.

Also, it is likely that diesel prices will go a lot higher than they are right now.

Needless to say, that is going to add even more fuel to our ongoing inflation crisis, because just about everything that we buy has to be transported.

This is yet another reason why our standard of living is going to continue to go down at a frightening pace in the months ahead.

We truly have got a colossal mess on our hands, and it is going to be with us for quite some time to come.

***It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael and my brand new book entitled “7 Year Apocalypse” is now available on Amazon.com. In addition to my new book I have written five other books that are available on Amazon.com including “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, “Get Prepared Now”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending digital copies as gifts through Amazon to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible.

I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, I strongly urge you to ask Jesus to be your Lord and Savior today.

Article cross-posted from The Economic Collapse Blog.

5 Signs That the Housing Crash Is Escalating a Lot Faster Than Many of the Experts Had Anticipated

Michael Snyder — Thu, 20 Oct 2022 10:31:14 +0000

The U.S. housing market is absolutely imploding, but nobody should be surprised. In fact, we were warned way ahead of time that this would happen. When the Federal Reserve told us that they would be aggressively raising interest rates, we all knew what this would do to the housing bubble. It was obvious that home prices would fall, home sales would plummet and home builders would get absolutely crushed. Sadly, that is precisely what we are witnessing. But instead of reversing course after witnessing all the damage that they have caused, Fed officials are insisting that even more rate hikes are necessary. So as bad as things are right now, the truth is that they are going to get even worse in the months ahead.

In recent days we have gotten some new data points, and they are sobering.

We haven’t seen numbers like this since 2008, and we all remember what happened back then.

Yes, just about everyone expected that the housing market would slow down, but hardly anyone thought that things would get this bad so soon.

The following are 5 signs that the housing crash is escalating a lot faster than many of the experts had anticipated…

#1 According to Redfin, the number of homes sold in the United States during September dropped by 25 percent…

Home sales declined the most on record in September as mortgage rates surged and pushed prospective buyers out of the once-hot housing market, according to a new report.

A repo rt from the real estate company Redfin shows the number of homes sold fell by 25 percent and new listings dropped by 22 percent last month, marking the biggest declines on record in both categories — excluding numbers at the onset of the coronavirus pandemic in April and May 2020.

#2 The number of new housing starts in the United States fell by 8.1 percent in September…

Home building pulled back in September, as buyers faced spiking mortgage rates that have made homes increasingly unaffordable.

September housing starts, a measure of new home construction, dropped 8.1% from August, and were down 7.7% from a year ago, according to the US Census Bureau. After a big drop earlier this spring, housing starts had been holding relatively steady up until July when rising mortgage rates spurred more prospective buyers to sit on the sidelines.

#3 The number of buyers touring new single family homes has fallen to a depressingly low level…

Traffic of prospective buyers of new single-family houses plunged to the lowest since 2012, excluding the two lockdown months April and May, and is now approaching even the levels of those two lockdown months, according to data today from the National Association of Home Builders.

The NAHB index for traffic of prospective buyers dropped to 25, about where it was in mid-2007, well on the way down into Housing Bust 1.

#4 Homebuilder confidence has now dropped for 10 consecutive months…

The overall confidence of builders of single-family houses fell for the 10th month in a row in October, as “rising interest rates, building material bottlenecks, and elevated home prices continue to weaken the housing market,” the NAHB report said.

With today’s index value of 38, the NAHB/Wells Fargo Housing Market Index is now nearly where it had been in May 2020 during the lockdown, and below where it had been in February 2007, on the way down into Housing Bust 1.

#5 Demand for mortgages has plummeted to the lowest level that we have seen in 25 years…

Mortgage demand, which has suffered four straight months of declines, fell last week to the lowest level since 1997, as interest rates continued to rise.

Homebuyers’ demand for mortgages dropped 4% for the week and was 38% lower than the same week one year ago, according to the Mortgage Bankers Association. Applications to refinance a home loan fell 7% compared with the previous week, in seasonally adjusted terms. Demand was 86% lower than the same week one year ago.

If you want to thank someone for this giant mess, you can thank the officials at the Federal Reserve.

They knew that raising rates would cause chaos for the housing market, but they did it anyway because they are scared to death of inflation.

But they actually played a major role in causing our inflation crisis. They should have known that pumping trillions of fresh dollars into the financial system over the years would cause rampant inflation, but they just wouldn’t stop.

Now they are trying to fix one crisis by causing another.

And in addition to absolutely crushing the housing market, they are also causing trillions of dollars in losses on Wall Street. In fact, the financial markets are on pace for their worst year since 1969…

So far in 2022, both the stock and bond markets have posted serious losses. To find another market that looks like this one, you’d have to go all the way back to 1969, according to data from BlackRock.

The S&P 500 is down nearly 24% year-to-date, and the Bloomberg U.S. Aggregate Bond Index has surrendered about 16%. Should both indexes finish the year in the red, it would be the first time that has happened in decades.

If officials at the Fed keep hiking rates, the markets could go down a whole lot more.

At this point, Bill Holter is warning that we could soon see “a crash that will make 1987 and 1929 blush”…

In closing, Holter warns, “The action you are seeing now is exactly what you saw in 1987, and this is what you saw in August and September of 1929. This is what happens prior to crashes. It’s massive volatility both ways . . . people are losing both ways. The longs get stopped out on the downside, and the shorts get stopped out on the upside. Then, the whole floor gives way, and that’s where we are. We are right on the doorstep of a crash that will make 1987 and 1929 blush. . . . Many people are going to lose everything overnight.”

Time will reveal whether Holter is right about this or if he is wrong.

But without a doubt, it certainly wouldn’t take much to push us over the edge.

Everywhere you look, economic conditions are getting worse, and the stage is being set for the sort of historic meltdown that I have been relentlessly warning about.

If officials at the Federal Reserve had any sense, they would stop raising rates immediately.

Unfortunately, they aren’t going to do that.

So much more pain is coming for the housing market, and this new crash could ultimately be even worse than what we experienced back in 2008.

***It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.***

Article cross-posted from The Economic Collapse Blog.

A Horrifying Drought Is Causing Widespread Crop Failures Throughout the United States and Europe

Michael Snyder — Fri, 12 Aug 2022 20:30:23 +0000

We really are reaching a major crisis point. Thanks to soaring fertilizer prices, insane weather patterns and the war in Ukraine, global food supplies have been getting tighter and tighter. So we really needed a banner year for agricultural production in both the United States and Europe in 2022, and that is not going to happen. In fact, unprecedented drought is absolutely devastating crops all over the northern hemisphere. A lot of people are complaining about how high food prices are right now, but just wait. If some sort of a miracle doesn’t happen, agricultural production is going to be way below expectations in both the United States and Europe, and that is going to have very serious implications for 2023.

Let me start by talking about the nightmare that is starting to unfold in Europe.

According to CNN, it is now being projected that farmers in Italy have lost “up to 80% of their harvest” because the drought has become so severe…

In Italy, farmers in some parts of the country have lost up to 80% of their harvest this year due to severe weather anomalies, the Coldretti farming association said Thursday.

How are those farmers going to survive?

Many farmers in France are facing similar losses because they have only been receiving a fraction of the rainfall that they normally get…

In France, where an intense drought has hammered farmers and prompted widespread limits on freshwater use, there was just 9.7 millimetres (0.38 inches) of rain last month, Meteo France said.

That was 84 percent down on the average levels seen for July between 1991 and 2022, making it the driest month since March 1961, the agency added.

Crop failures in France would be a really, really big deal, because France is normally “the fourth-largest exporter of wheat” in the entire world…

France is the fourth-largest exporter of wheat and among the top five exporters of maize globally. Poor harvests due to drought may heap further pressure on grain supplies after Russia’s invasion of Ukraine caused global shockwaves.

The situation in Germany is also extremely dire.

It is being reported that things are already so bad that some sections of the Rhine River have dropped to dangerously low levels…

Germany’s most-important river is running dry as Europe suffers through a drought that is on course to become its worst in 500 years, with terrifying wildfires burning once again in France.

Water levels in the Rhine – which carries 80 per cent of all goods transported by water in Germany, from its industrial heartlands to Dutch ports – are now so low that it could become impassable to barges later this week, threatening vital supplies of oil and coal that the country is relying upon as Russia turns off the gas tap.

Of course the U.S. is dealing with severe drought too.

According to the U.S. Drought Monitor, about half of the nation is experiencing some level of drought at this moment, and we are being told that the ongoing megadrought in the Southwest is the worst in 1,200 years.

Things are particularly bad in Texas. If you can believe it, Dallas just had a stretch in which they had no measurable rain at all for two straight months…

The daily highs in Dallas have been 95 degrees or higher for three straight weeks, much hotter than normal for this time of year. The Dallas-Fort Worth area has even more problems amid an extreme drought going as far back as May 17. One hundred percent of Dallas County is in an extreme drought, while 21 percent of the whole state is experiencing exceptional drought — the most intense category of drought — according to the U.S. Drought Monitor.

A 67-day stretch with no measurable rain came to an end in Dallas on Wednesday when 0.41 of an inch of rain fell. That was the second-longest dry streak at Dallas-Fort Worth Airport. The standing record was 85 consecutive days that spanned much of the summer of 2000.

The lack of moisture has been crippling for the state’s absolutely massive agriculture industry. There are 247,000 farms and ranches in Texas, and nearly all of them are deeply suffering right now…

The drought pressing Texas’ agriculture industry — which is responsible for 10 percent of the state’s gross domestic product — is pushing farmers and ranchers to the brink. The state’s 247,000 farms and ranches covering 127 million acres haven’t had a whole year of rain since 2017. Almost 24 million of Texas’ population lives in drought-facing areas.

As of the first of August, less than 1 percent of the state was not facing some level of drought or abnormal dryness.

At this point, conditions are so dry in Texas that many ranchers have been forced to “panic sell” their herds. For much more on this, please see my previous article entitled “Ranchers Are Selling Off Their Cattle In Unprecedented Numbers Due To The Drought, And That Has Enormous Implications For 2023”.

Other states in the Southwest are also being hit extremely hard by this drought.

Over in Utah, the size of the Great Salt Lake just continues to get smaller and smaller due to the relentlessly dry conditions…

The warm arid desert in the West certainly had its fair share of the summer heat. Salt Lake City International Airport recorded a high of 100 degrees on July 28, marking the 16th day that month of triple-digit temperatures and breaking the previous record of 15 in July 1960. Last month, the city tied its record for the hottest recorded temperature of 107 degrees for the fourth time, according to NOAA weather data. The other occasions on which the mercury rose to 107 in Salt Lake City were in June 2021, July 2002 and July 1960. Record-keeping began there in 1874.

That intense heat hasn’t just made the residents of Utah sweat though — it has also magnified the ongoing megadrought, which has contributed to the dire state of the Great Salt Lake. Between July 2021 and 2022, the average daily water level of the lake dropped by about one foot, a historic low, and is expected to fall even farther.

There have always been times of drought all throughout history, but in modern times we have never seen the United States and Europe simultaneously experience such a severe drought for such an extended period.

For years I have been warning that we are moving toward a time when global famines will become quite common, and widespread crop failures throughout the western world this year would greatly accelerate that process.

We are being told that a child dies every 11 seconds from malnutrition.

But as food supplies get tighter and tighter, global hunger is going to get far, far worse than it is now.

In 2023, there simply is not going to be enough food for everyone.

I hope that you are getting prepared for that, because next year is just around the corner.

***It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.***

Cross-posted from The Economic Collapse Blog.

We Haven’t Seen Carnage Like This Since 2008

Michael Snyder — Mon, 20 Jun 2022 01:16:40 +0000

Trillions of dollars in market wealth has already been wiped out, and investors are bracing for a chaotic second half of 2022. We truly haven’t seen anything like this since the financial crisis of 2008. The early months of 2020 were volatile due to the eruption of the COVID pandemic, but the Federal Reserve quickly rushed to the rescue.

The Fed poured trillions of dollars into the system, and that spurred a rally that was absolutely breathtaking. But this time around the Fed isn’t going to be riding to the rescue any time soon. The Fed is committed to raising interest rates in a desperate attempt to get inflation under control, and the size of the Fed balance sheet is now being reduced. So there will be no artificial life support for the financial markets for the foreseeable future, and that is really bad news for those that are seeing their portfolios get absolutely monkey-hammered.

Things have been particularly brutal for crypto investors.

Last November, the total global market cap for all cryptocurrencies peaked out at about 3.1 trillion dollars.

Over the weekend, the total global market cap for all cryptocurrencies actually dipped below 850 billion dollars…

The crypto market suffered one of its most dramatic selloffs in years this week as the prices of top cryptocurrencies declined as much as 35% week-over-week as fears of a broad economic recession intensified.

On Saturday, the total global market cap of cryptocurrencies sank below $850 billion as top tokens tumbled.

Poof. More than two-thirds of all “crypto wealth” is already gone.

CNBC is using the word “carnage” to describe what we have been witnessing in the crypto industry, and I think that fits the nightmare that is currently unfolding quite well…

Carnage in the crypto market won’t let up, as token prices plummet, companies lay off employees in waves, and some of the most popular names in the industry go belly up. The chaos has spooked investors, erasing more than $2 trillion in value in a matter of months — and wiping out the life savings of retail traders who bet big on crypto projects billed as safe investments.

It has been estimated that 16 percent of all U.S. adults either own or have owned a cryptocurrency. So a whole lot of people out there are really hurting right now.

Last November, the price of Bitcoin peaked at $68,789.63. As I write this article, it is sitting at $20,170.10.

Last November, the price of Ethereum peaked at $4,891.70. As I write this article, it is sitting at $1,093.40.

I feel really sorry for those that decided to pour their money into cryptos near the peak. Stock investors are also getting pummeled these days. In fact, U.S. retirement accounts have already declined in value by almost three trillion dollars thanks to rapidly falling stock prices…

The U.S. stock market rout that has put U.S. equities in a bear market isn’t just reducing the net worth of billionaires like Elon Musk and Jeff Bezos. It’s also taking a toll on Americans’ retirement savings, wiping out trillions of dollars in value.

The selloff has erased nearly $3 trillion from U.S. retirement accounts, according to Alicia Munnell, director of the Center for Retirement Research at Boston College. By her calculations, 401(k) plan participants have lost about $1.4 trillion from their accounts since the end of 2021. People with IRAs — most of which are 401(k) rollovers — have lost $2 trillion this year.

Stocks have just kept falling and falling and falling.

In fact, the S&P 500 has fallen for 10 of the last 11 weeks…

The S&P 500 posted its 10th down week in the last 11, and is now well into a bear market. On Thursday, all 11 of its sectors closed more than 10% below their recent highs. The Dow Jones Industrial Average fell below 30,000 for the first time since January 2021 this past week.

Cryptos have already collapsed, but stocks theoretically still have a ton of room to keep falling. There are some that are speculating about what will happen if the Dow drops all the way to 20,000, and that would definitely be a crash of historic proportions. Of course the housing market is much larger than the stock market, and that is starting to implode too.

If you can believe it, the total value of the U.S. housing market was valued at 43.4 trillion dollars earlier this year. Unfortunately, mortgage rates are absolutely skyrocketing and that is going to change everything. According to Redfin, home sellers are already dropping their prices at a rate that we have never seen before…

The highest share of sellers on record dropped their list price during the four weeks ending June 12 as mortgage rates shot up to levels not seen since 2008, dwindling the pool of home shoppers.

It is being reported that in some areas of the country home prices have already been reduced by as much as 20 percent. And this implosion is likely to accelerate as the Federal Reserve just pushes interest rates higher and higher and higher.

How long will it be before millions upon millions of U.S. homeowners are underwater on their mortgages just like we saw in 2008? As I warned last week, those that do not learn from history are likely to end up repeating it.

The U.S. economy was almost certainly heading into a recession anyway, but now a crypto crash, a stock market crash and a housing crash all at the same time will accelerate matters greatly.

According to one recent survey, 60 percent of corporate executives expect a recession to begin “in the next 12 to 18 months”…

More than 60% of executives expect a recession in the next 12 to 18 months, according to a survey of CEOs and other C-suite executives conducted by the Conference Board, a business research firm. That’s a stunning increase from the end of 2021, when just 22% of executives forecast a recession.

Sadly, we aren’t going to have to wait that long. As I detailed last week, there are lots of numbers that indicate that a major economic downturn is already here.

It is time to batten down the hatches, because a “perfect storm” has arrived. Global events are accelerating at a frightening pace, and the months ahead are not going to be pleasant.

***It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.***

I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, I strongly urge you to ask Jesus to be your Lord and Savior today.

Photo by Ilya Chunin on Unsplash. Article cross-posted from The Economic Collapse Blog.