Something much worse than high gas prices is coming. It’s called ‘demand destruction’ and will be catastrophic.
USA- Have you ever heard the term “demand destruction?” If you have not, you soon will.
In basic terms, it is a permanent downward shift on the demand curve in the direction of lower demand of a commodity, in this case energy products, typically induced by a prolonged period of high prices or constrained supply.
Over the past several weeks, we have seen skyrocketing energy costs. Those of course are the visible costs which we see every time we go to the gas station or fill our oil tank at home. However, most people lose sight of the true costs of increasing energy through products manufactured using fossil fuels.
Last week, the U.S. and other countries cut off the import of Russian oil, which we were told was a necessary “sacrifice” to stick it to Putin. We were warned by the feckless Joe Biden and his spokesperson, as well as by media and members of Congress that paying higher prices at the pump is “patriotic.”
We were lectured by the insufferable Stephen Colbert that paying $10 or $14 a gallon for gas was the right thing to do, and all we had to do is buy a $100,000 Tesla like he drives.
What Biden, Colbert and others conveniently forgot to mention is that fossil fuels are so much more than gasoline, natural gas, and home heating oil. Glenn Beck of The Blaze explained that $150 barrels of oil will impact a lot more than gasoline.
As the price of oil increases, get ready to hear a lot more about demand destruction. Because when the price of a barrel of oil goes up, a lot of things will follow. When a commodity is priced so high that consumers find alternative ways to use left of it, that is demand destruction.
Aside from being a result of increasing commodity prices, it is also, Beck explains, an economic tactic.
In this case, don’t dismiss the probability that this is being done on purpose in order to hamstring the American people with the Green New Deal.
After all, why would Biden insist on maintaining his restrictions on drilling, fracking, and other means of acquiring American oil if he wasn’t deliberately trying to push the leftist green agenda?
“We’re in demand destruction right now with oil and…I think this is being orchestrated,” Beck said. “I think this is another thing that just didn’t feel right. I think our demand destruction of oil was orchestrated.”
Beck continued, “I want to explain…why I say it’s really bad to get off Russian oil without opening up our own oil fields. I like that morally we’re trying to help Ukraine and we do it by canceling, cutting off their blood supply over in Russia, but we’re also cutting it off here and the rest of the world.”
What most Americans don’t understand is that only about half of each barrel of oil is turned into gasoline. The other half is turned into all manner of things, including but not limited to:
Solvents, ink, insecticides, sweaters, bicycle tires, tires, dresses, petroleum jelly, motorcycle helmets, life jackets, insect repellent, fertilizer, diesel fuel, motor oil, roofing, linoleum, nylon rope, water pipes, shampoo, paint rollers, toothbrushes, combs, paint brushes, bandages, ammonia, shaving cream, refrigerators, toothpaste, iPhones, and hundreds of other products.
“There’s going to be demand destruction,” Beck warned. “So, if you thought that there was [already] a problem with supply and demand, you ain’t seen nothing yet,” he continued.
“So when you see the price of everything going up, just remember, the people who are leading you to this are the ones that say we have to get rid of fossil fuels. Less than half of each barrel of gasoline.
The rest of that barrel goes to make everything else we have grown accustomed to. Everything else. So, when your friends tell you that the price [of gas] is worth it—really?
“You cannot disconnect the price of oil, and the price of gasoline, from the price of food or plastic or anything else that you are used to buying. Demand destruction is coming, and it is coming fast.”
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