Worse is coming and the markets seem to be in complete denial about it.

Oil has only really maintained the ~$100/barrel price because of record SPR releases worldwide. Also, that $100 price is kinda fake because it's a future price. The spot prices got much higher. Well, that runway is coming to an end. If the Strait of Hormuz re-opened today , we'd still be facing an energy shock. Plus there's famine coming.

Now the US won't run out of oil or refined petroleum products. The uS is now a net exporter. But it's a global marekt so the prices are going to go way up. And some countries and heavily dependent on oil for electricity. They are going to face blackouts.

So even though fertilizer shortages are skewed towards the Global South, food prices too are global so they're going up too.

In 1973, the energy shock took ~6 months to manifest [1].

But I think the real problem is dynamic pricing. Inflation is insidious. People start raising prices on the expectation of rising prices, thus causing prices to rise. But so many industries now are going well beyond that by essentially colluding through AI tools (eg RealPage) to further raise prices.

I honestly don't know how this ends without a deep, long recession.

[1]: https://paulkrugman.substack.com/p/oil-crises-past-and-possi...