“We hope you enjoyed the beer, oh, like I mean the movie, eh.” – Strange Brew
They never talk about the worst pupil of Socrates: Mediocrates.
I was 22 when I bought two six packs of “Old German Lager®” for $1.25 each. Not each beer, each six pack, and as I recall this was when a decent beer cost nearly a buck a beer. I then went down with my friend to watch the local minor league team play on a Tuesday afternoon. That is something you can do when you’re in college. Now, Tuesday afternoons are mostly 72°F (43 hemi-demi-centi-meters) and partly-fluorescent with a chance of popcorn smells from the communal microwave.
I used to think that the best beer was one that was so cold it was nearly ice, and best served in an ice-cold mug. Then my nephew brought me a hot one on a summer day that he’d been shaking for five minutes. That one was pretty good, too. However, I can say that Old German Lager™ was the single worst beer that I have ever had in my life.
But more on that later.
The world is a really big place. Oh, sure, sometimes people say (when they run into a coincidence) that it’s a small world, but my standard response to that is, “let’s see you paint it.”
I tried to get thinner at the paint store. It didn’t work.
The world really does seem large. When I’ve spent time on a plane flight for work over the breadbasket, I can recall sitting for hours just looking at the patchwork of fields filled with cattle or crops stretching to the horizon. It seems huge.
And it is huge.
The miracle of the modern world is certainly not the iPhone®, but agriculture – it’s what allows people to keep living. Mankind has always known hunger and many people in history have expired from the “diet plan that never fails”. But in the last 20 years, as our population reached the highest levels ever, there were more fat people than starving people for the first time on Earth.
The problem of solving world hunger was no longer a matter of producing the food, it was no longer a matter of being able to distribute the food, it wasn’t even a matter of paying for food – all the hunger on the planet was simply a matter of politics.
In 2022 that won’t be the case.
Fertilizer prices are at record highs. Additionally, the diesel fuel the farmers rely on to plant, harvest and transport the food is at near-record highs. Right now, we’re living on the harvest from last year. This year, we’re perhaps . . . headed towards a disaster.
I’ve mentioned before that Russia and Ukraine together account for around 25% of global wheat exports. Russia has a harvest projected that will lower its exports in 2022, and is currently exporting at least some grain (though I bet China and India have a coupon to jump to the head of the line to buy food). Ukraine? I’m thinking that planting and harvesting and producing fertilizer (Ukraine was an exporter of fertilizer) is the last thing on their minds.
I guess that would make me an entremanure.
Food production is pretty finely balanced with consumption – there is no Strategic Doritos® Reserve that the President can tap into if the party runs low. In reality, the world typically has some buffer – about 100 days (from the latest data I’ve seen) of grain. Most of that isn’t in countries that are importers – it’s in grain silos near the farms, waiting for shipment to the Doritos™ factory.
That’s good news. But the recent things I’ve seen show that, at least in the United States, farmers are attempting to plant everything they can, but the markets today are weird. Several stories have pointed out that some local grain elevators aren’t buying grain, because they’re worried the market will collapse and they won’t be able to sell the grain at a profit.
The farmers depend on those sales to buy . . . fertilizer and diesel. Will prices collapse? Probably not, since money printing even more money seems to be the only thing that Congress can agree on. It will be painful in the United States. It may be catastrophic in countries where the oligarchs live on $0.47 per day.
A friend’s wife ran off with a tractor salesman. She wrote him a John Deere® letter.
The world economy is likewise balanced in the production of “stuff”. There’s a shortage of cars. Why? There’s a shortage of chips. So, the 20-year-old hulk of a car that has traveled just as long as light travels in a second that I have for a spare if my spare breaks down has doubled in price in the last year. Last year, it was worth $2,000. Now, Pugsley says it’s going for $4,000.
Progress, I guess, if you own a used car that’s within three oil changes of traveling as far as the Moon’s orbit. I might even get a few extra bucks from Elon Musk.
Metals are likewise going through the roof – basics like copper and nickel are increasing. I got a burger last week – it was up 25% – in two weeks. Tires? The local dealership said that they were up 25%. This month. And PEZ®? Forget about it.
Want inflation?
It’s here.
The drivers that started the snowball running down the cliff was all the free money during the Great ‘Rona Rave of 2020-2021-2022. Politicians have the idea that they have to do something, even if it’s stupid. Printing money and paying people not to work is, 100%, stupid.
Of course, the next idea is one right out Nixon’s playbook – before the election, heat up the economy so that everything is running on full speed when the votes are cast. It’s the same idea as throwing vodka in the punchbowl to get the party going. Hangovers? Who worries about hangovers at midnight?
Except if you’re drinking Old German Lager©. I said that Old German Lager™ was the worst beer in the world. It was. We drank it and it tasted, at best, questionable. But it’s beer, right?
Well, about the sixth inning the headache started. But neither my friend nor I were in the slightest bit buzzed. We were completely sober, but had gone straight to the hangover.
“Premium” might be false advertising.
That’s what we’ve done. Like Nixon’s inflationary party in the 1970s, we went straight into the tough times. We went from the Vietnam boom to the bust, complete with high oil prices and a Cold War. We are in the hangover part of history.
And this time, we didn’t even get the buzz.