Overheard yesterday:

 

"Gas prices are down."

Enjoy it while you can would be my advice.

Reuters Analysis-Oil majors face output slump, deep losses if Russia stops Kazakh pipeline

You have to understand the geopolitical gamesmanship that is going on here. Russia invades Ukraine. Supply shocks ripple through tons of commodity markets (it's why these "inflation has peaked" people don't know baby poop from apple butter as my buddy says.). We release oil from the strategic reserve, believe me when I tell you other countries are blowing through theirs as well. Reserves of oil and gas are at all time lows currently globally. 

Releasing those barrels from the strategic reserve lowers gas prices temporarily. Think band-aid when you need an emergency room team working on you and you might get an idea of the dire straits we are about to find ourselves in. And here's the way it works, the US government sells the oil to the oil companies and they turn around and get it to the areas of the world where it's needed. You don't get to be happy about temporary lower prices at the pump and complain about the methods that got them there. 

Since we did that? Releasing that much oil from the Strategic Reserve? You can count on having trouble with that Kazakh pipeline. Somebody said the Russians were turn of the gas this winter when this all started who could that have been? It's on here somewhere. (Honeys area of expertise :-). Somebody also said it was a mistake to release oil from the strategic reserve as well.

The US Is Depleting Its Strategic Petroleum Reserve Faster Than It Looks

So yeah, you can pretty much count on that pipeline being shut down at this point, and the turbines that Siemens Energy repaired in Canada? Yeah don't be surprised if the Russians say they were inoperable, not repaired right etc...anything to blame the shut down of the Nord Stream 1 pipeline to go on longer than the usual yearly maintenance window.

Canada to return repaired Nord Stream 1 turbine, expand sanctions on Russia

Also overheard yesterday:

"Our orders for automotive aluminum are way down. We can't get magnesium hardly."

Talked on here about Russia's mineral wealth till I'm blue in the face:

A lack of magnesium is going to affect the aluminum industry and thus all the consumer products which aluminum goes into:

"The metal and its alloys are used extensively for aircraft construction, building materials, consumer durables (refrigerators, air conditioners, cooking utensils), electrical conductors, and chemical and food-processing equipment."

It will also, just like the overheard individual was commenting on, affect the adversely affect the automotive industry.

Aluminum

Thats just one mineral.

Here's a list of some more of Russia's extensive mineral reserves:

"NATURAL RESOURCES IN RUSSIA

Russia is probably richer in natural resources than any other country in the world. It has abundant supplies of oil, natural gas, timber and valuable minerals, such as copper, diamonds, lead, zinc, bauxite, nickel, tin, mercury, gold and silver..."

"Russia possesses rich reserves of iron ore, manganese, chromium, nickel, platinum, titanium, copper, tin, lead, tungsten, diamonds, phosphates and gold."

(Pretty much everything you need for a comfortable existence in the modern world.)

"Russia’s diverse mineral resources have given many of its products a strong position in world markets. Of particular economic importance are diamonds, of which in 2006 Russia accounted for one-quarter of world production; nickel (one-third); cobalt (20 percent); platinum (40 percent); and aluminum (12 percent).

(The #'s are dated but they still have a bunch of the above. Its a by product of having one third the earths land mass, and they have a fifth of the worlds lumber in Siberia alone.)

"The platinum group of metals (platinum, palladium, rhodium, ruthenium, iridium and osmium) are among the rarest, expensive and useful of all metals. The are commonly found in the same regions, and are used in the automobile industry, mostly catalytic converters (38 percent), electrical and electronic industry (29 percent), dentistry (9 percent) and other (24 percent). Nearly all the world reserves of these metals are in South Africa and the former U.S.S.R."

"Russia is the world’s largest nickel producer. Nickel is a metal that is essential in the making of stainless steel and other alloys. It is important in the chemical and aerospace industries."

"Titanium, Manganese and Potash in Russia

Titanium is an expensive metal prized for its strength and lightness. It is used mostly in jet engines. air frames, and space and missile applications. It is produced in the Ukraine, Russia, Kazakhstan, Japan, the U.S., the United Kingdom and China.

Potash is an important ingredient in fertilizer. The main producers are Canada, Israel, the former U.S.S.R. and Germany. Vanadium is an alloying with steal and aerospace titanium alloys. It is also used as a catalyst in the production sulfuric acid. The world's major producers and the former U.S.S.R. and South Africa.

The major sources of manganese (a metal essential to in steel and iron production) is not found in mineral quantities in the U.S., Western Europe and Japan. South Africa and the former Soviet Union have over 80 percent of the worlds reserves."

Etc etc etc...

Somebody told you when this all first started:

"The world is going to want Russia's oil and minerals more than it's going to care about Ukraines

freedom."

Who was that?

Oh, and inflation hasnt even started, let alone peaked.