The President's Daily Brief - June 13th, 2022. Why Inflation Continues to Rise Even Higher.

Episode Date: June 13, 2022

It’s June 13th. You’re listening to the President’s Daily Brief. I’m your host and former CIA Officer Bryan Dean Wright. Your morning intel starts now. First up, Record inflation reported late last week, worst in 40 years. I’m going to explain how DC politics around natural gas and diesel are driving a big part of it. As always, I’m keeping an eye out for developing stories. Put these two on your radar. First, Wheat Wars: Ukraine’s wheat will not be getting out of the Black Sea. And it’s not because of the Russian Navy. I’ve got an important update this morning. Second, Monkeypox: Well, actually that name might be changing. All because some scientists think the current name is racist and discriminatory. I’ll explain. Plus, for my new listeners who saw me on TV on Friday, I’ll tell you where to find that brief on al-Qa’ida re-organizing to attack us. All up next on the President’s Daily Brief. ------ Please remember to subscribe if you enjoyed this episode of the President's Daily Brief. Learn more about your ad choices. Visit megaphone.fm/adchoices

It's June 13th. You're listening to the President's Daily Brief. I'm your host and former CIA officer Brian Dean Wright. Your morning intel starts now. The brief you're about to hear is in the same spirit of the actual President's Daily Brief, which is a top secret summary of the most critical events in the past 24 hours, all delivered to the president each day by the nation's spymasters. And so, ladies and gentlemen, I am your spy and this is your brief. Here's what we're going to be talking about this morning. First up, record inflation reported lately. last week, worst in 40 years. I'm going to talk to you about how DC politics around natural gas and diesel are driving a big part of that. And as always, I'm keeping an eye out for developing

stories. Put these two on your radar. First up, wheat wars. Ukraine's wheat will not be getting out of the Black Sea. And it's not because of the Russian Navy. I've got an important update to share with you. Second, monkey pox. Well, actually, that name might be changing. All because some scientists think that the current name is racist and discriminatory. I'll explain. Plus, for my new listeners who saw me last week on TV, I'm going to tell you where to find that brief on Al-Qaeda reorganizing to attack us. All up next on the President's Daily Brief. This is a Bose moment. You've been there before. Somebody's apartment, small talk that's going nowhere, plastic up, that's almost empty. It's not great. Then someone hits play on a Bose speaker. Heads nod, feet tap,

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The only parts designed, engineered, tested, and backed by General Motors. You can find your perfect fit for most makes and models, and choose from three tiers. parts, including GMOE or gold and silver aftermarket parts. Visit gmparts.com for more information. First up this morning on the PDB, by now you know that inflation just hit a new 40 year high. Lots of examples to report, unfortunately. Here's one. The company Kraft Heinz, they make Miracle Whip, classical pasta sauce, Maxwell House coffee. Well, they announced that they're raising prices even higher starting in August. So,

heads up. But I want to focus this brief mostly on two other things, that while we don't eat them, the cost is eating us, and that is the cost of natural gas and diesel. I'm going to show you why this is such a big deal, even if you don't think you use or have ever purchased either. So let's start with natural gas. Prices are up about 140% this year, and that's a big problem, because natural gas is the largest source of fuel for power plants in the United States. They've got about a 40% share. And that means your utility bills are likely going to go up. So why? Why are these prices skyrocketing? Well, two big reasons. First, Joe Biden signed an agreement with Europe a few months back to ship some of our natural gas supply, all so that they could wean off of Russian gas. But that's left us with less. So our prices have gone up.

Well, the second issue driving these natural gas prices, climate change politics. You see, a big portion of U.S. gas production actually comes as a byproduct of oil production. In other words, when you drill for oil, you get natural gas as well. But a lot of small and medium-sized companies are really reluctant about cranking up their production because they're being told by Washington, D.C., that oil and gas are bad for the climate and that the industry has no future. So you might remember when Joe Biden was asked during the 2020 campaign if he'd close down the oil industry to fight climate change. And he said, quote, I would transition from the oil industry, yes, end quote. So Kamala Harris made similar comments too.

Well, all that rhetoric absolutely affects how much oil and gas companies are willing to invest. First, in existing oil and gas fields, plus exploring new ones. And then to build out all the pipeline infrastructure, to move everything to market. So the bottom line, folks, is that natural gas prices are not going to come down anytime soon. So here we go. All right, let's switch gears from natural gas to diesel. Because as the price of diesel goes, so goes the U.S. economy.

And that's because diesel powers, well, everything that powers our economy. So consider those container ships that bring goods from abroad. Those run on diesel. the trains and the trucks that collect those goods from the ports and then bring them to warehouses and then to your stores. All of those run on diesel. Agriculture too, the tractors, combines, all of those need diesel to work in the fields. And the list just goes on and on. Construction companies, logging companies, mining companies, all require diesel powered equipment.

Well, the price of diesel is at or above $5.50 a gallon, and that's an increase of 70% from just a year ago. It's even worse on the East Coast, by the way. It's hard to overstate how devastating this is for small and medium-sized businesses, especially truckers and farmers and loggers. They're facing thousands of dollars in fuel bills when they fill up, not a hundred or so for normal consumers like us, which, by the way, is already awful.

So some of these folks are truckers and farmers and loggers. They're going to pass those expenses to you, but others can't. and they're going to end up going out of business. So again, we ask, why are prices rising so terribly? Well, one big reason, we don't have as many refineries as we used to. In 1980, we had about 250 refineries nationwide. That number is down to 124 today. So that means less supply and higher prices.

The problem is even worse on the East Coast, and that's because they're down to seven refineries, and then used to be 24 back the 1980s. By the way, forget trying to build a new refinery anymore, because regulations for doing so are so incredibly onerous. It's almost impossible. Plus, with oil and gas companies being told that their industry is going to be killed off because of climate change, there's not much of an incentive to spend massive amounts of money to build new refineries. Okay, so we've covered a lot, so let's quickly recap.

Inflation is at a record high. We all fuel it in our pocketbooks whenever we go to the grocery store, or we get that tank of gas. But we've got two other very big drivers of inflation, too, prices for natural gas and diesel. Now, there are different reasons for those big price hikes. It's true. The war in Ukraine is one, to be fair,

but prices were rising dramatically even before the war started. And that means that we should really focus on climate change policies. Because of regulations, we know that regulations and rhetoric that are trying to push America into a new, renewable energy? Well, the old energy companies, as it were, oil and gas, they're not drilling more, or they're not going to build new refineries or pipelines. And that's because they know that Joe Biden and his party, for better or worse, are coming for them and the industry. So their logic is why invest all this money when DC's just going to shut it all down? Okay, so if you were in the White House this

morning receiving this brief, we would start with a thought experiment. I want us to put aside what we think about climate change. And I just want us to assume that Joe Biden and the Democrats are right. That climate change is real, it's manmade, and it's going to get worse if we don't do something about it. So the strategy is to shut down America's oil and gas industry using really intense crushing regulations, or we're just going to scare off a bunch of investment. Okay, fine.

Is the replacement ready? In other words, Joe Biden wants renewable energy to take over the power of, of America's economy. But is that industry ready to do that? So let's think about that differently. Do we have cargo tankers ready to run on batteries to sail across the ocean? The answer is no. We don't have anything even remotely close to that. Okay, well, how about your tractors and combines? Again, the answer here is no. There are no electric tractors. There are no electric combines, certainly none that can run on scale to feed the entire country. And even if you did have all the battery powered equipment somehow magically invented today,

what would you plug all that into? Have you replaced all of your coal and natural gas plants with enough solar and wind farms to charge all of your batteries? The answer is no. As of 2020, only 12% of America's energy mix was renewable. And as I briefed you all on last week, we are not set up to excel in this area. We are virtually absent of any solar panel manufacturers in this country, as you know. Folks, there are a dozen other considerations to point out here, like a lack of battery production or the lack of minerals to make all of them. But the bottom line is this.

Even if you believe climate change is real, that it is manmade and it's going to get worse if we don't do something about it. The replacements for oil and gas are just not game ready yet. The technology, the logistical tail. of charging stations, for instance, it's just not ready. And that's not an opinion. Whether you like it or not, it's just fact. And yet by every reasonable measure, we're strangling or even shutting down traditional energy production before renewables are ready to take over. And that's a big reason for why natural gas prices are up 140%. And diesel, up to 550 a gallon and rising. So America's president and all of us, actually, We have to understand something. That this transition from old energy to new, from oil and gas to solar and wind, well, if we do this before it's ready, that's not going to just hurt consumers or a bit of inflation here and there. It's going to destroy America's economy.

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Stop taking bad travel advice. Start comparing hundreds of sites with kayak and get your trip right. Kayak, got that right. As always, I'm watching a few other stories this morning. put these two on your radar. First up, wheat wars. We've got a new problem trying to get Ukraine's wheat out of that war-torn country and into global markets using the Black Sea.

So we've talked about this route before, and the main problem, of course, is Russia's Navy is blocking Ukraine's ports. But this new problem is a big one. A report came out late last week showing that there are hundreds of anti-ship mines, just floating on or under the surface of the Black Sea. So Ukraine is saying that they've found almost 400 Russian mines. Plus, they're also admitting that they too have put down mines, but they didn't share how many or where. And that means at the very least, it'll take three months to get rid of the mines from both sides.

And that actually assumes that both Ukraine and Russia cooperate to identify where they've placed everything. And to make matters worse, some of those mines have actually broken free. they're untethered and floating around the Black Sea. That's caused seven merchant vessels to be hit, too sunk, actually. So the bottom line here is that the Black Sea option for Ukraine's wheat is for now, not an option. Not for the summer's harvest, anyway. So that leaves the northern route through Belarus that I briefed you on late last week. And that's the long shot.

Because Belarus, as you'll recall, is very friendly with Vladimir Putin and likely is not going to cross him. regardless, I will keep you posted as soon as I learn more. Finally, a monkeypox update. There's a group of scientists from Africa and Europe who are urging world health leaders to drop what they call the quote stigmatizing language used to describe the monkeypox virus and its variants. And they're saying that the virus has to be renamed to something less discriminatory. So their argument is that there are two main variants or clades and they're called the West Africa clade and the Congo basin clade. And they say that, well, those are not very nice names. They are bigoted and could lead to

discrimination. So the World Health Organization actually agrees with them and says that there's broad support for changing the name. But the WHO doesn't have the ultimate authority to change the name. That power actually rests with another organization, and that's known as the International Committee on Taxonomy of Viruses. Well, apparently that group also thinks that. that the Monkey Pock's name has got to go. And they'll be voting on a name change in the next couple of months. I don't know what that's going to be, but I'll keep you posted. And with that, ladies and gentlemen, we conclude our morning brief.

So before I let you go, two quick notes. For those of you who saw me on TV last Friday, and you're just joining in for the first time, welcome. I've got that Al-Qaeda brief that I promised you. Just go to last Tuesday's podcast. I covered the intelligence assessment there that shows, Al-Qaeda is regrouping and can strike us in about two years' time. Second, do you recall me briefing you all on those winter viruses acting odd over the summer? Well, I think I'm coming down with a bug myself.

So if the podcast this week has some surprises, maybe a guest appearance by my amazing producer, Eric, well, that's why. And with that, and as always, we close out the show, reminding each other of why we are here, talking about our country and our world. It's the creed of every good spy and every smart American. It's from John chapter 8, verse 32. And you shall know the truth. And the truth shall make you free.

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