What happens when Europe runs out of fuel? And how will that affect the USA?

 

Brandon Smith, whom we've met often in these pages, has a grim energy forecast for Europe over the coming months.

Here are the developments Europe will see in the near term:

• Rolling Blackouts
• Further Price Inflation In Energy
• Business Shutdowns Due To Operating Costs
• Energy Fascism – Informants And Government Monitoring Of Usage
• Further Price Inflation In General Goods Including Food
• More Government Price Controls
• Governments Pushing The Idea Of Universal Basic Income
• Rationing Of All Necessities
• Severe Economic Decline And Job Losses
• Large Numbers Of People Freezing In The Winter
• Civil Unrest

I could continue on with this list but I think you get the idea. It’s not going to be pretty. For those of us in the US this seems like a scenario out of sight and out of mind, but this will not be the case. Europe is going to be scouring markets for energy supplies, anywhere they can find them. Keep in mind, the US is ALREADY sending 75% of its liquid natural gas exports to Europe. There is very little resource backstop for the EU to dip into.

This means less oil, less gas, less coal, less of everything for purchase in America. Sure, we could be producing most of these resources in-house and cut exports to the EU, but the Biden Administration will never allow that to happen.

At the very least, prices are going to rise everywhere on the majority of goods. I continue to predict that US gas prices at the pump will climb to around $7 a gallon on average. Propane and other heating commodities will rocket beyond previous highs.

Supply chains will be weakened. European manufacturing will take a massive hit and many of these businesses will not be able to operate at normal capacity. Most of them will have to reduce production and institute layoffs. This means that European goods will be exported less frequently and prices on the remaining goods will spike in the US.

European agriculture will also be hit hard. Food production will fall as energy supplies and fertilizer supplies falter. This means they will be buying up more grains and foods from other nations, causing prices to jump for everyone else including the US.

Civil unrest in Europe is assured. Similar conditions are already brewing in the states, but it’s hard to say if Europe’s problems will trigger public anger here. More price inflation might be the straw that breaks the camel’s back, but this is unlikely until mass layoffs start later this year and into 2023. It takes time for the public to realize things are not going to return to normal.

Overall, the US economy will continue its path towards destabilization, though it seems that Europe will see the worst of the global crisis over the next several months. Unfortunately, the interdependency created by globalism has left every country in the world overly reliant on the others. If any one link in the chain breaks, the entire system breaks. This is why decentralization is so important – It creates redundancies and protects each individual nation from a potentially disastrous domino effect.

There's more at the link.  It's well worth reading Mr. Smith's article in full.

The Biden administration is so ideologically hide-bound in its efforts to reduce dependence on fossil fuels that it probably regards European demand for US natural gas and other energy sources as a fortuitous development.  The more it can export to Europe, the less will be available for US businesses and consumers, forcing us to either do without, or spend vast sums of money re-equipping our fleets with electric and other vehicles.

Unfortunately, that's going to make our present economic woes even worse.  I don't think we'll fare as badly as Europe looks likely to do, but it's going to be painful, there's no doubt about that at all.  I don't want to think about how badly $7-per-gallon gasoline, forecast by Brandon Smith, will hurt most families' finances.  It's bound to soak up income that would otherwise buy food and other necessities, making life harder all round.

Miss D. and I are seriously considering what this will mean for us.  It's likely we'll become a one-vehicle family for the short to medium term, parking one vehicle and using the other one (the most economical one, of course!) between us, combining journeys whenever possible to save on fuel.  I daresay we'll be far from alone in that.

It might be a good idea to start thinking ahead along those lines.  How will you cope with $7-per-gallon gasoline?  How will your family cope?  Start planning now, then you won't be caught off-guard if and when that happens.  If local traffic is safe enough to permit it, could some of your family ride bicycles for local errands?  How about car-pooling to and from work, or a nearby town?  Could you walk to and from nearby shops and services?  What's public transport like - its frequency, safety (including crime rate), cleanliness, etc.?

Peter

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