Topic: Natural Gas, Electricity, Oil / Gas & Inflation- Nightmare Scenario (Read 324 times)

Yeah unfortunately I believe your right, many economists are predicting that it's going to take some time before we are out of this mess.  Right now we are at a 40 year high when it comes to inflation, so doing as many little things as you can to save money will all add up.



This is certainly not a bad idea. However when it comes to metals, I'm not a big fan of owning equities versus owning the real thing.  The problem with equity precious metal products like mutual funds, ETFs etc is that they tend to sway too much with the market, where as the physical metals do not.  Whenever there is time of panic in the markets, even though these types of equities house hedge type items, people will still panic and sell them off, hence moving with the markets.  I agree overall though, these are nice hedge products.

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A very easy path for partial inflation protection for Americans, or those with access to US investments, would be the ETFs (all by Invesco) of commodities:

Ticker: DBA (an ETF of agricultural commodities)
Ticker: DBB (an ETF of base metals like copper and nickel)
Ticker: DBC (an ETF of many commodities including crude oil)

I have bought some DBA and DBC for my grandchildren as a partial hedge against inflation.  Yes, these are "paper commodities", but they provide exposure to inflation hedges beyond the more well known precious metals.

It won't stop anytime soon so what you can do is accept the situation and find ways how to lessen the burden of these increasing prices of all the commodities around you. Try to look for options where you can save money, like if you have a small land or garden, start planting vegetables or any crop that you can eat so you don't need to buy anymore from the market. Don't buy unnecessary things, just be contented on what you have. Sell those things or gadgets that you feel you don't need anymore and are just cluttering around your house. Try to live a minimalistic life. It will also give you more peace of mind. Don't wait for the government's aid because it may not come.

It's rising even higher in our country and most of us are suffering. Every economic sector is affected and it even affects our daily living. The government should function this time but instead of doing something, they're also taking advantage of it together with huge businesses. I hope that this nightmare would come to an end because, to be honest, it's worse than the pandemic.

I'm not so sure that would actually be the case.  I do know that some people have utilized bitcoin mining in their home as a source of heat.  I know some people are even renting out their places to co-live with someone who promised to mind bitcoin in their home just to heat it up.  I think overall however that the electricity costs would out pace the cost of the natural gas.  Of course it all depends on home much power ones using.  Then you have to think about the cost of the mining equipment, fixing issues with the equipment over time etc etc.  It is an interesting thing to ponder though.

Well of course running out of food and power would be a true nightmare.  There are many things more "nightmarish" than what I've been speaking about here.

I think the whole world is suffering from the economic effects of Russia's invasion of Ukraine. The same is happening in my country even if we are highly dependent on Middle Eastern oil rather than Russian oil. My country, the Philippines, is importing most of its oil from Saudi Arabia and then from Kuwait and UAE. Our Russian oil import only accounts for a small percentage and yet when the crises in Ukraine happened, the price shot up all of a sudden.

At a certain tipping point, it could become cheaper to heat ones residence with bitcoin mining rigs, than it is to heat via fossil fuels. Wouldn't that be an ironic turn of events? (Sorry to say water is wet, but I hope everyone knows they can greatly save on heating and cooling costs by improving residence insulation)

My food costs have near to doubled in some cases. Gas prices are up. Everything is up. I've expected these trends for many years and not done a good job preparing. Have some solar capacity to offset rising electrical costs. Limited food production to offset rising market costs. What I currently have can be expanded on. If circumstances continue to deteriorate, hopefully I won't be too badly off.

The region I reside in is said to have sufficient capacity for 7 days of food and power, if container shipping and supply lines were completely cut. I would say that would be the true nightmare scenario.

Imagine you would walk by the end of the month out of your workplace with a check that size!
You're from the US, you pay 5$ for a gallon, imagine living in the Philippines or India with 1.35-1.65 per liter, but with an average wage of ~$500 at best.

The outcome of this is pretty simple, some countries will simply cut consumption in half as they will not afford it anymore, once that happens there will be an imbalance in production and demand, oil will again go down, of course not as fast as the panic buy happened but it will, it makes literally no sense for consumption growth to keep up with the production growth that is on the horizon, not at these levels.

Oil has been over 100$ in 2014-2015 only to fall back to 45 and then 30 one year later, the same story in 2008.


That's an illusion, the government is actually paying the difference from your pocket but you don't realize that right now, you will soon do when they will be out of money and they will need to increase taxes to cover that up. But yeah, rather than gasoline, sunflower oil has become something "to die" for there, right?


Fearmongering, two world wars 7 economic crises after which the world hasn't been set back by even a decade and you think this will push us back a century?
You're overly underestimating the resilience of the economy and the human species.

Yes, friends, hard times are coming. I think soon we will return to several centuries ago. I don't want only to work to pay for gas for my car. And what option remains? Just put some money together for the future and hope that the world will be calm. It is unfortunate that ordinary people can suffer because of political problems.

I don’t think this is going to make a huge deal across the world, at least for the United States and Europe. Here in the United States I believe only 5% of both our crude oil and natural gas comes from Russia. As much as I don’t like paying these extreme prices, losing 5% to the evil empire that is Putin and Russia, I’m fine with that.

True, even though they took this decision in the interest of Ukraine not joining NATO, they have also sacrificed their entire economy.  Even though Russia has stopped exports of its natural resources.  Their economy is also paralyzed so the best solution is to cooperate with economic partners such as China and India.  Europe and the US are their main targets because they have interfered with the sovereignty of their countries by playing games in Ukraine.  Whatever it is I hope it gets better soon, I hope Putin stops it soon.  Because the world will face a long economic crisis

When we were in a Group call with our university teacher in Ukraine he told us how everything is nominal, the price of grains is nominal as well but what they are struggling with is the price of oil and gas ⛽ Makin things more expensive in Ukraine.

It's not just US, UK or other countries as well being affected with the hike in prices but other European countries as well, making it harder to cope and they have to do certain things like :

1. Find other sources to transfer, import the oil/ gas at fine prices
2. Switch to other sources and that too very fast

Russia is still supplying India at good prices to make sure this keeps their economy stabilized and have now asked China for other help as well. Putin might be having side effects of cancer treatment but he is not destroying just Ukraine, he is destroying whole of Russia along with him

Even if they somehow resolve their issues, it is not going to be one day solving and suddenly we are back to regular life. I mean it is going to be long time before Russia and the west. However, people are overreacting the causes of this situation we are in right now. I mean remember the fact that we had gone through much worse before and the life still went on. We literally just passed 2 years where people barely worked and the world still kept turning around.

You have to realize that we are strong united, and when it is a problem that risks everyone, we can solve it. If there are economical problems, we will suffer, but then everything will get better, then suffer again and better again and so forth.

The key thing in everything is to adapt to the existing situation, and that means changing life habits. If the price of fuel is too high for you, try to use public transport more or if you live in a smaller place why not use a bicycle, it is completely free, it is good for health and the environment. As for the price of electricity, you need to turn off all devices that you do not use because they consume even when in standby mode, and replace ordinary light bulbs with energy-saving ones. If you have the conditions set up a few solar panels that will definitely pay off and give you free electricity for years to come.

And what about Bitcoin? Haven't we talked all these years about inflation coming and that it's wise to invest in Bitcoin to preserve and increase the value of our assets? 4-5 years ago you could have $1000 in your wallet or bank, and you could invest it in Bitcoin and worry less about inflation today.

In order to reduce our dependence on everything that others produce and sell to us, we must begin to change and become a society that produces to be self-sufficient at the level of the individual, family, and community.

More likely than not there'll be a major economic crash and recession because of inflation, low oil prices, and the war in Ukraine. That's the worst case scenario. Best case scenario is that Ukraine and Russia can resolve its issue and restore whatever certainty the market had before. That doesn't deal with inflation, but it's a start.

https://tradingeconomics.com/commodity/eu-natural-gas

Natural gas prices recovered a bit but you still see they're above pre-war trading price. My prediction is that these prices won't recover well into the year and onward, if we're lucky.

Dam, that is huge cost for your house. I am not sure what is your location but considering the gas you use it must be cold region and that is why you require so much gas to heat up the house. Well, in my region India, things are already way costly. However we are not that much out of hand as far as LPG is considered. The rates been fluctuated since many months now and we are used to it. Our most of houses use LPG cylinders which are door delivered and run for like a month in middle class family. This adds up the cost of $12.99, for bigger families it could be double lets say nearly $26 a month.

However, electricity and fuel costs are almost as same as yours. I am not sure how good is this comparison considering entirely two different hemisphere and the way trade operates and the way taxes are incurred. But this is what it is as I mentioned above!

I'm glad I don't heat my house with natural gas.
Electricity prices for the households in my country are regulated by the government,so there wasn't any significant increase during the winter.I don't expect any increase anytime soon.
The food price inflation and gasoline/diesel prices going up are the biggest problems where I live.The inflation is going to be nasty.Most of the inflation is actually the merchants spreading panic about having a shortage of food and gasoline and creating price cartels.
Unfortunately the Bitcoin price isn't pumping,in order to help us with this situation.
Let's hope that the war in Ukraine ends after a month or two and the global economy starts getting back to normal.However,I don't expect the inflation to slow down until the end of 2022.
 

Yeah our electricity pretty much doubled since last year. For those with gas guzzlers or heavy SUV they are suffering whenever they are at the pumps. These last few days wherever I go there is always people complaining about the expensive gas prices. You can already see deals on many huge trucks and SUVs with big V8 engines.

What will all this lead to ? Well most likely a recession will follow which will quickly correct all of this. The price of oil will crash. The CPI will be negative most likely and real estate/cars will be cheaper since most people will be out of reach to buy one.

Yes, we are gradually feeling the inflation from commodities in the near future. Although not desirable, perhaps we will still see the global food problem in the future. The developments are terrible, but perhaps we will not be able to change them and have to face them. I personally feel very fortunate to still be able to pay for the necessities of life, but many people don't have that luck.

And now, this war added more reasons to elevate those prices. I think, this crisis will give sufferings to many around the globe. It is not only in the European area but the whole world will suffer. It is like a domino effect everywhere. I guess, we need to live with this situation and make the most what we can do to survive. After all, humans will always adopt the change whatever is happening around him.