re: US diesel crack spread hits record $102 for the first time on supply disruptions.

quote:

---

Deleting existing trucks will have a negligible effect on anything except emissions. The fuel savings are negligible, DEF costs are negligible, reliabilty costs are not negligible but vastly overstated.

---

Not true. Many many modern diesel trucks have DEF issues. I’ve had first hand experience on multiple trucks. The inconvenience of buying DEF alone is worth deleting it

quote:

---

I think he is worried

---

He should be. Inflation has remained above 3% for most of this year thus far. Inflation is a function of too much money in the economy and Congress is on track to spend $2.1T in deficit this year.

Fun fact: that's the 3rd highest deficit in history, following 2021's $2.77T and 2020's $3.13T.

Fun fact #2: All five of the five largest deficits in US history have happened since 2020.

In order to cut spending just to balance the budget (ie: not pay the debt down one cent) while still servicing the debt, it would mean cutting every penny the federal government spent this year by ~35% (without debt servicing it would be ~29%, but not servicing would be suicide). Cutting that much would create a deep recession or even depression. The resulting popping of the consumer credit bubble would absolutely put us into a deep depression. With the vast majority of the citizenry being far removed from agrarianism, it would likely make the Great Depression look like a church picnic (and no, that's not hyperbole).

As long as deficits remain higher than giraffe pussy, inflation is going to continue to remain sticky well above the 2% target. As long as it remains sticky, the Fed is going to feel pressured to raise rates. As long as there is a probability of the Fed raising rates, yields are going to stay high. Along with that, as long as deficit spending continues apace, there's going to be less desire to buy US debt without an increase in auction tails which will translate to an eventual growth in yields.

In other words, it's a no-win situation and Jerry's mythological "soft landing" remains just that: mythological.