A stake through Heartland – Inflation and supply chain problems are putting severe strain on the country’s manufacturing class – Any impact?

From the BOE Report

May 3, 2022 Terry Etam

Another week, I visited my mother in Saskatchewan, in a small town in the northeast of the province, but it really wasn’t. This is the parkland border between farmland and forest, not farther north than Edmonton. This area is sparsely populated; if you had drawn a circle around Momstown with a radius of 40 miles, that circle might include ten thousand people.

From that circle, every year, thousands of heads of cattle, enough to give, give or take, a million steaks and five times as many hamburgers. Enough grain to break out of that circle to feed a decent sized city. Enough wood to build hundreds of houses. I’m lazy with these numbers because I’ve done enough basic research to know that they’re statistically intelligible statements.

At the coffee shop Wednesday morning, 40 heads gathered around to see who came in; longing eyes because it was a new guy. It was a small sea of ​​hoodies, plaid and plaid hoodies, and curved hats, a place that could turn out onto the street in ten seconds if someone outside needed help.

I sat down to order breakfast. The menu lacks granola and yogurt. I go with the flow; I’m not going to make any waves in bacon and egg country. (The next morning’s waiter, a burly guy with a bald head and unflattering tattoos, told me what he had said to a customer who had recently angrily berated him from behind. across the restaurant and I wouldn’t.)

I noticed that I was the only one eating; others there seem to be only for bottomless cups of coffee that prize quantity over quality. The menu board helps explain why; A breakfast special that’s $8 on a printed menu from a year ago can be $12 on a sandwich board that’s cramped and unavoidable by the entrance. Around the corner at a grocery store, a 4-quart bottle of milk costs $8.50. Inflation can be 8% in the eyes of the government, a number that is only useful when it really quantifies the huge gap between the theory of officials and the reality of workers.

My brother lives in the same small town; He is stuck at home waiting for a new generator for his truck. Parts that used to be in stock are now “ordered” and the simplest thing can bring a person’s mobility or industrial process to a halt instantly. There is no public transport, no taxis, and the supply chain becomes more fragile the further the major hubs travel.

Yes, it’s a small community, but anyone who wants to venture more than a few hours from a major urban center will know these places are the backbone of the country, and the per capita output of goods is a fraction of that. amazingly high number. Sit down with a farmer one day and find out how many loaves of bread from 3,000 acres grow for 50 bushels per acre and you’ll be stunned (well, I’ll save you a math and even health consciousness: that farm will produce about 13,500,000 drives value of whole wheat bread per year).

The place is hurting. Restaurants charge high new prices because they have to, very few people eat out. People are shrinking and spending on essentials (coffee goods seem to be the spending of the whole society), so shops are affected. People travel less and do less, up to a point. Fuel is a precious lifeline that cannot be replaced.

Many people have no love for oil companies, living the common mistake that high oil prices are a plot by the aforementioned companies to pickpocket consumers. This fallacy is a gift from an oil and gas industry that seems completely and forever inexplicable. Winning a lawsuit every few years where no one can prove you didn’t puncture the consumer is not the backbone of a wise strategy, but it goes on forever and no one learns. So here we are. The makers of this thing would save gas in a heartbeat if they could. But they can’t, and they know it, and because they live in an area where self-reliance can save lives, they’re acutely aware of the value of their fuel system despite all the odds. grumbles.

The imaginary circle from the first segment of r = 40 would be about 5,000 square miles, or 13,000 square kilometers, and in both cases about 2% of Saskatchewan. There are many such circles all over Canada. Some do not produce seeds but are rich in minerals. Some don’t make minerals but lots of fish. Some produce a lot of vegetables. Some have small but important producers to keep the big operators going.

These circles are in the background; rural people, truck drivers (I already told you), equipment operators, welders. Most Canadians live in urban centers and only think of these places in the context of distant relatives, or if any of them captures a great shot and story that makes Big News.

These places do what they do when conditions permit. Conditions will become much more difficult. It’s hard to come up with a lot of basics like small and boring parts that the device won’t run without. Expenses are skyrocketing but income is not keeping up. The pressure on people and businesses can be clearly seen.

More fundamentally, the lifeblood of all this, affordable energy, is disappearing. These are places that depend on diesel and gasoline. They are more acutely aware of the cost of fuel, as are the working classes across the country, especially those on lower incomes. “Just go electric” is a highly unwelcome suggestion, along the lines of “Let them eat cake.”

They will turn away from hydrocarbons for a second if there is an alternative that is reliable and works well in ALL conditions and is reliable there. But they also work with batteries more than anyone, and know those limitations sensitively and painfully. There is nothing to dazzle these people with BS. Everything is accepted once proven.

The land visit is bittersweet. As a hydrocarbon worker, high commodity prices provided a sense of immense relief and the company’s survival after a brutal few years. But being here on the ground in the heart of the country, seeing the effects of those high oil and gas prices, my stomach ache. Women with small children put in a $10 pump. The business is idle or closed. Grocery stores sell a lot of pasta and spaghetti sauce.

Of course, not everyone has difficulties. Some are booming, like fertilizer companies selling whatever they can produce to make money. Grains and beef would be much more valuable and financially stable large farms would survive, as would permanent businesses with sufficient reserves. But there is a dense layer of humanity in our country that will fight bravely. Inflation hit those who are least able to cope hardest.

And we live in Canada. These same food and fuel pressures account for billions of dollars in developing countries. As with LNG, the West wins the bidding wars, and so does food. All the circles of undifferentiated productivity around the world are on the line.

We should fuel the market and we should get incentives from governments to do so. Affordable reliable energy brought us here and is essential to keeping us here. Here’s a paradoxical claim from a beneficiary: it would be great to see fuel prices drop. Canada’s less-populated circles wouldn’t be producing the bulk of the things they do, if prices hadn’t fallen.

But in far-flung urban centers, the laptop class is more interested in trams, crypto and COP26 and cartoon villains. This divide between those who buy Carhartt because it lasts forever and those who buy it because the exciting element is dangerous and rebellious and is a harbinger of very bad things to come. Of course, division is nothing new; Rural and urban people have long had different concerns.

But global mismanagement of the fuel system – on the very bad advice that the old one can now be underfunded and torn down as false fanatics have led to believe that a ready – is chilling proof that the balance of power has spiraled out of hand.

A host of academic social scientists flood our government with highly biased and ill-informed energy policy advice that resonates because our government full of similar social scientists. But can any of them change the tire? And what do they produce? Let them eat the policy?

Slava Ukraine! Find out how the world fell into such a disastrous energy state, and how to get out – catch the “Fossil Fuel Madness” at, Indigo.caor Thanks for the support.

Read more insightful analysis from Terry Etam this, or email Terry this. PS: Dear email reporters, the email process is welcome, but I’m having tracking issues. Apologies if comments/questions go unanswered; they are not ignored.

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