In this month’s blog, I’ll be taking a broad-scope view of the scary times we’re in - and sharing reflections and examples of why we should fear not - but plan and work hard instead.
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Welcome back for another bonus episode of the Local Experience Podcast. This is Kurt Bayer and it's time for my October blog. I love the fall. Cool mornings, warm and sunny in the afternoon later sunrises, making it easier to sleep in, and the air is crisp and full of life. We're heading into the Halloween season and then things get scarier from there. Freezing temperatures still shorter days, icy roads and snowstorms. We don't suffer too much from these things in our modern age or in our mild winters, but with the natural gas furnaces, automatic snow days for school and the heated seats, but one can understand how the timing of this holiday developed. When you reflect back to the times of our forefathers, they were going into the lean times, relying on preserved meats, canned vegetables, and constantly chopping and burning wood to stay warm in many regions. People mostly ate what they grew. That. So if they had a poor crop year, the winter ahead would be longer and hungrier than usual. But they didn't worry about Russia using tactical nukes and setting off an Armageddon or about running out of gas to heat homes and power plants, or runaway inflation or climate change. Or melting our poles and flooding our largest cities, or about the impending new world order in a future full of getting our protein from a tube and our children from a lab. Wow. Went off the rails pretty fast there. Huh? I'll contrary on prayer, we're right where I want us to be reflecting on the scary times that we live in and the perhaps scarier times ahead. The truth is, it is human nature to fear for the future. In fact, it may be one of our most defining attributes. If not for this fear, we would not sacrifice, nor would we plan. We would live for the moment and we would have long sense become extinct. In this month's blog, I'll be taking a broad scope view of the scary times. And sharing reflections and examples of why we should fear not but plan and work hard. Instead, this winter is likely to feel longer and to be hungrier than an any in recent memory. Energy inflation is adding hundreds of euros a month to the average household expenditure in Europe, a threefold increase from 2021, which will have citizens pinching pennies at every grocery store and going out less often to restaurant. Which will leave the restaurant staff with shorter hours and pinching their pennies and going out to the pub less often and buying fewer, cute new outfits, which will leave the pub workers and the retail store earners, pinching pennies. And you're getting where I'm going with this, right? Economies are funny, all interconnected and reliant on so many moving parts and markets, and they don't like to shrink, especially in our modern age. The fiat money. The economy works best when it's growing at a nice modest pace With low inflation, low unemployment, and small slowdowns and shrinkages can set a spiral in motion that leaves everybody poorer and all the prices higher. That's why the Western nations printed so much money during the Covid pandemic to keep from going into a recessive tailspin. Basically, we shut down a bunch of productivity and killed a bunch of jobs in businesses, some permanently, and rather than the economy suffering the consequences, immediately we put it on. A buttload of credit between six and $7 trillion of new US debt has been added to the balance sheet since March of 2020. And across the world, everyone did the same. Almost 20 trillion in new debt has been added to the government's balance sheets, and most were already too leveraged. And then inflation, Our inflation rate in the US has been eight to 9% most of the past year. And here in Colorado, we're at the top of the nation at 15% nailing it. Governor, To my mild surprise, the Federal Reserve has taken this seriously and has raised interest rates numerous times and promised to keep going until the inflation monster is back in the cage. The challenge is interest rates on five year treasuries are now up over 4% from 1% most of the last few years, and that higher interest spend has a real effect on the budget. The interest on our $30 trillion national debt at 4% in simple math is a. I know it's not simple, but it's real. And we as a society need to understand how dangerously leveraged our government and governments around the world have become. Our societies are not too big to fail, They're too leveraged to succeed. Here's an encouraging snippet from a recent article of the Peter G. Peterson Foundation. The growth in these interest costs presents a significant challenge in the long term as. According to cbo, the Congressional Budget Office projections, interest payments would total around 66 trillion over the next 30 years and would take up nearly 40% of all federal revenues by 2052. Interest costs would also become the largest program over the next few decades. Surpassing defense spending in 2029, Medicare in 2046 and Social Security in 2049. The inflation that we're suffering from is a direct consequence of two main things, Supply disruptions, mostly still a hangover of covid lockdowns and mandates making availability of goods and shipping a greater challenge, and the global money printing, making all of the, the existing monetary units just a little bit smaller. The biggest disruption, of course, has been the energy supply. Putin cut off all the gas from Europe as a consequence of their support of. And the EU has been scrambling to refill their storage and generate power through any and all means. During recent months, they have especially been purchasing l and g liquid national grass, intended for Asia in the Middle East, driving prices and availability to levels that have sparked protests in Pakistan and Sri Lanka and other places. It's all connected. They've even been resorting to restarting coal power plants across Europe, finding it a superior decision to kick the can down the road on climate. Then to have their citizens freezing to death or marching in the streets, or both. Better to keep that kind of stuff in the poor countries. But the authorities in the EU have bound themselves fairly strictly to their climate goals, which is noble, I suppose, but rather ineffective on a global scale. If the Chinese and the Indians and the Brazilians and the Iranians and so many others pay out no mind. Meanwhile, America makes progress by converting to natural gas power made available by the evil frack. And outsourcing our manufacturing to the poor places like Europe has done. Now, we're not gonna fix climate change in this sort blog, and probably not in my lifetime. We've got 8 billion people in the world, give or take, and about 7.5 billion of them don't care about using less carbon. They want more and easier and more dependable and affordable. They want stable electrical power, pumped water for their homes and villages, cars, and scooters instead of walking and to cook with something other than wood or animal. you know, what would reduce our carbon footprint arm again, I found this old cartoon from 1982, both humorous and terrifying, and the cartoon depicts a natural gas pipeline, also at the end of a tank with Germany and France saying, while the fuss over a simple pipeline with a communist flag on the tank. To me, that's the scariest prospect in our current season, Nuclear. Between the US and Russia, we've got over 10,000 nuclear warheads in inventory and across the world, something over 13,000. You've heard it said that there are enough nuclear weapons to basically end the world, but there's a bit of catastrophizing in that statement. Millions and millions would die in the immediacy, especially if large cities were bombs, but the major impact would play out over the months and years ahead. Ash clouds would cause rapid and significant cooling, hampering crop yields for years to come and causing widespread famine. And of course it would be radiation poisoning and increases in cancers and probably war over the remaining productive lands, likely a significant decline in the population for a time. The economic disruption would be devastating, and I think most all insurance companies would fail and much else, but then life would go. One would hope that there are enough distributed resources to put human knowledge and understanding back together again. And even if the lights go up for a time, we humans don't require much. Give us food and shelter and relationships, some challenging things to do, and we're pretty happy. There's an old expression that some things are fun when you're going through 'em and you barely remember it later. But the real fun times are when you struggle through a challenge with friends or family, and those are the times you look back upon fondly. I'd suggest that we are at our happiest when we struggle through challenging times. At least it is toward a meaningful outcome. And some of the reasons that times are so scary today is that they're too easy. Hard times create strong men. Strong men create good times. Good times create weak men. And weak men create hard times. That's Author g Michael Hop. There will be hard times ahead there always. The stage for a broad recession is set and the governments of the world are too leveraged to get beat up can down the road any longer, and there's nothing you can do about it. And there's a lot you can do about it. You can get your financial house in order. Add new skills. Work harder than your coworkers. Get more education. Start your own business. Raise a garden, find a more affordable place to live. Medic. Start a side hustle, get some chickens, start going to church. Focus on your health, build your network. Read the 12 rules for life from Jordan Peterson and try to do 'em. There is so much that you can do. And if you do these things with others, the impacts are even greater. And before you know it, we're back in the good times.. So stay safe out there. Be creative, build new skills and relationships. And if you want your government to do things for society in the future, instead of just paying interest on the luxuries of the past vote for small government today. and fear not the scary times, often look like the fun times in the rear view lens. Thanks for listening. Have a great day.