OPINION: War on Oil, War on the Economy
Justin Haggerty | The Daily Knight
While the leftist fake-news media promotes its propaganda that the Colonial Pipeline was shutdown due to a "cyber attack," the American east coast has been hit hard with skyrocketing gas prices, long lines at gas pumps, and thousands of gas stations running dry. The fact is, the American economy is hand to mouth and it's economic fabrics are unraveling.
The malware story, if true, is at best a perfectly timed cover story for the economic issues plaguing the Colonial Pipeline and nearly every industry in the United States. A better analysis of inflation, material availability, and labor shortages will provide a clearer illustration of the truth.
In April, the U.S. inflation rate hit a 13-yr high according to the consumer price index.
Market Watch reported that "the rate of inflation over the past year jumped to 4.2% from 2.6% in the prior month — the highest level since 2008," before the market crash heading into the Great Recession.
Big banks are stuffing their coffers with cash, the rich are playing with free money on the market, and big businesses are getting huge loans with little to no interest rates. The rich get richer and the poor get poorer with devalued currency.
The stimulus checks and unemployment benefits that you receive are nearly a free expense to the government to buy your loyalty and compliance. In fact, as the Federal Reserve prints more dollars, the "increased money" in your pocket is reduced to lower values and weaker purchasing power in the sight of rising costs.
Take a look around, costs of food, raw materials, oil and gas are skyrocketing due to lack of supply, insufficient labor, and the devaluing dollar. And, the Usurper in Washington wants to raise taxes.
War on Oil
Thanks to the fake news media, many are quickly buying into the narrative that the gas shortage is only due to a "cyber attack" on the Colonial Pipeline. At best, the story is perfect timing to cover up the weaknesses in the economy. Any openminded person would recognize that Colonial is not the only oil and gas supplier and that there "should" be more than one week's worth of gas supply circulating the country.
With most invoices being net-30 days and understanding production, there should be around 30 days of supply in process (being produced, in transit, in storage, and at the pumps). If the oil and gas industry was healthy, a one week shutdown of a single pipeline wouldn't have been noticed at the pumps.
This is a war on oil. Usurper Biden said it himself during last fall's debates with President Trump; speaking about the oil industry, "we will phase it out"..."we will work it out."
From Biden's threats, along with Pete Buttigieg, to tax Americans for how many miles they drive per year to shutting down the Keystone Pipeline, which killed 11,000 jobs, the White House has declared war on the industry. Just yesterday, with the full support of the White House, Michigan Governor Whitmer shutdown the pipeline that supplies 50% of Ontario and Quebec's oil.
Not only is the act reckless, but downright criminal. To endanger the livelihoods of millions of people to check the boxes of eco-socialist objectives is a high crime against good and hard working people. History lesson, the Japanese bombed Pearl Harbor in response to the United States' oil embargo on Japan.
North America is an interconnected, complex economy; one that President Trump integrated even stronger with updated partnerships with Canada and Mexico. Don't expect Canada to sit idle and let their most populated provinces and largest economies come to halt, because the United States cut off 50% of their oil supply. They, being resilient, as resilient as they can be under tyrannical covid-19 lockdowns, will find oil and gas elsewhere. Most likely, the oil and gas will come from other parts of America that are less reluctant to hurt business. This will further stress our supply chains, reduce freight availability (pipelines reduce the need for truck and intermodal), and increase prices.
The fact remains, I never thought I would see gas lines in the United States.
American Industry Drowning
Industries across the United States are drowning in rising material costs, insufficient labor supply, and low freight availability. Most companies are experiencing extreme lead times and can't get raw materials quick enough.
Steel mills, oil refineries, fabrication plants, food processing facilities, and lumber mills are behind 3 to 4 weeks on production. Some facilities are still working to complete March orders and deliveries.
In my line of work, steel availability is my biggest concern. Multiple Nucor steel mills are working to catch up on orders that I placed toward the end of February. If Nucor falls any further behind, we do not have enough material to get to June. As steel supply struggles, prices continue to skyrocket on a weekly basis, sometimes as much as $.02/lb. In September 2020, our base price for sheet metal was $.20/lb; today, it is nearly $.70/lb. Several of the older gentlemen in my company recognize many similar signs to 2008.
So, why are the mills, processing facilities, and refineries falling behind? They are experiencing the same problems that I'm seeing in my three manufacturing plants.
In addition to our suppliers being behind on orders, my plants have internal issues that continue to hurt efficiencies and grow lead times. Labor supply is a major one.
Today, the U.S. Bureau of Labor Statistics estimates that 9.8 million, roughly 6.1% of the workforce, are unemployed in the United States. It's sad, because I could hire 12 people, especially welders and maintenance techs, today. Drive around town and you will see dozens of "help wanted" and "hiring now" signs.
Yet, American industry can't put a dent into the 9.8 million unemployed, because the government pays them more to stay home. The average worker isn't informed how inflation is drastically devaluing the currency that they are collecting on unemployment and through the stimulus payments. Other than times of war and the universal draft, never in American history has American businesses had to compete with the federal government for labor.
Imagine if everyday 4 to 10 percent of your workforce called out or slipped into termination so they could earn unemployment. For my daily operations, that would account for nearly 10,000 to 22,000 lbs of finished goods failing to be produced. Every 2 to 4 business days, one full tractor-trailer load would miss production, and at the end of the month the company would be behind around 315,000 lbs. Of course, we burn overtime to make up for loss of production, but that only increases costs, which inevitably increases prices. Imagine this shortage across every town, city, and state in America.
The lack of available freight carriers is also a major problem for the American economy. According to data from logistics companies like J.B. Hunt, there are only enough carriers in the United States for roughly 60% of available loads. Even if a facility was on schedule for fulfilling an order, there is a 40% chance that the load will not get picked up when scheduled. In my experience, we have 2 to 3 loads that get missed daily, thus extending my customer's lead times and making it more difficult for them to hit their delivery dates without burning overtime.
To make sure that a carrier is found, companies have to raise prices to win drivers' attention; sometimes paying $200 to $300 more per load. This cost is passed onto the customers. Since the fall, I have seen a freight increase (including fuel surcharge) from $1.25/100lbs to $3.10/100lbs.
Like any company, we have raised our prices accordingly to support the increasing costs of the business and continue to provide for hundreds of families in Georgia. To be fully transparent, we manufacture storage shelving for distribution centers across the United States. Like us, they will also continue to increase the prices on the goods that they sell.
What Next?
In my opinion, we are heading for the biggest economic correction in U.S. history. Oil and gas is just the beginning and the first sign of the supply issues in the American economy.
Inflation has returned to the record levels before the crash of the Great Recession. Big banks know this and are hedging their cash by buying real estate. 25% of all mortgages in the past 12 months have been bought by banks, thus, along with inflation, driving up the cost of real estate to dangerous levels. My boss's sister recently sold their house outside of Atlanta for $2M to a bank that outbid six other bidders. Does that sound normal?
Our economy is about to collapse, and I say this with a light heart. These issues are far beneath the capabilities and competencies of the American worker and American industry. We are far better than this, and yet the government and communistic policies are forcing the economic fabric of the United States to slowly unravel.
My personal advice:
- Tighten up personal and family budgets; get rid of any unnecessary costs.
- Restructure and lower large expenses.
- Grow a garden (I'm serious); labor and freight shortages are putting a strain on food stuffs.
- Pull some cash from savings; not a bad idea to have some readily available.
- If feasible, sell real estate; most houses are receiving four to five bids and selling $30,000 above listing price.
- Sell stocks; take your profits and run.
- Hedge inflation by investing in crypto and silver.
In Christ Crucified and the Most Victorious Heart of Jesus.
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