One of the more amusing aspects of economic data is that it is backward looking. By the time economic chaos is in the news, and people begin to panic, or politicians begin planning to deal with the problem, it’s already history.

This means that governments and central banks are like bus drivers using the rear-view mirrors to steer. With the same sorts of results as you see on Russian dash-cam footage videos on YouTube.

It would be an amusing state of affairs. But don’t forget that you’re on the bus with them!

And so, we have to live with the consequences. Like when central banks pretended inflation was “transitory”.

Well, UK inflation hit 6.2%, a 30 year high, in February. Meanwhile interest rates are stuck at 0.75%…

But, like I said, this is backward looking. And these days, the doom and gloom of what’s predicted to be coming next is downright terrifying.

I mean, if inflation was that high before the impacts of the invasion of Ukraine were felt, what will next month’s data be?

What economic data will come out when, as Paul Krugman put it in the New York Times, “Vladimir Putin’s decision to raise food and fuel prices,” shows up in inflation statistics?

Yes, Vladimir Putin’s decision to raise food and fuel prices…

Well, Nigel floated the possibility of double-digit inflation in his video with Rob Marstrand, for a start.

But, you might not have to worry about the inflation data so much anymore. It might not even make the news if some other more dire predictions come true.

Did you ever think you’d read this headline: “Biden Warns Americans a Food Shortage is Coming”?

I mean, I expected a food shortage, but I still can’t believe a journalist actually wrote that headline in this day and age… of censorship and tribalism. I thought they’d go down in denialism, right down to the point of starvation, before writing something like that.

Substacker (that is to say, an online platform that gives journalists pretty much free rein without being troubled by managing editors) extraordinaire Doomberg, who has been right about the energy crisis so far, has moved on to food. Its latest prediction? “We believe we are at the onset of a global famine of historic proportions.”

Only read it on a full stomach.

This year’s food shortage would only be the beginning, though. Remember, our present bout of inflation is “cost-push”. Nobody is making much money out of the spiking cost of everything. It’s driven by supply chain chaos and government lockdowns.

And so, farmers are unable to pay for the fertiliser or energy they need to make the next harvest much of a success either.

Just as Ukraine and Russia are big energy and food exporters, so too is the region a major exporter of fertiliser and fertiliser inputs (things that get used to make fertiliser).

And that’ll transform the problem into a global one, affecting even the places that have enough food this year because they’re not as directly impacted by Ukraine and Russia’s food exports.

But the energy crisis might not be finished with us yet either. The Telegraph has another worry:

Vitol, the world’s largest oil trader, has warned that diesel could be rationed amid a squeeze on supplies as Russia’s war on Ukraine intensifies. 

Russia is a leading supplier of diesel to Europe including the UK, which gets almost a fifth of its diesel from the country.

And “Europe imports about half of its diesel from Russia and about half of its diesel from the Middle East. That systemic shortfall of diesel is there.”

So, if you think £100 is too much to fill up a family car with petrol, just wait till there isn’t any petrol!

It appears the transition from price spikes to outright shortages is coming. You’ll wish for the days of toilet paper hoarding and lockdowns that kept you out of your car, unless you were going on a “sight-seeing” tour to Barnard Castle.

The Telegraph’s Charlotte Lytton and Ed Cumming actually went right out and said how bad things are:

Fury road: How soaring fuel prices are causing chaos in Britain

Criminals stealing oil, drivers fleeing petrol pumps, the cost of living crisis continuing to grow… is this our Mad Max moment?

Mad Max? And you thought I was too doom and gloom…

But no energy crisis is as bad as a food crisis, even if they are only distinguishable by a matter of time. If we have Mad Max over fuel, what’s coming over food?

The Hunger Games!

Now all of this sounds awful. But is any of it true?

I have great faith in free markets to fix these sorts of problems. Oil and gas wells can come online, farmers can adjust what they grow and fertiliser can be found elsewhere.

The only problem is, governments are now busily trying to fix these problems too. And we know what that means…

After a decade of demonising oil and gas production, politicians are now demonising the lack of it… They’re absolutely shocked that their policies have worked, for once…

The Germans passed a law mandating full gas storage while their current facilities are still being emptied.

The Spanish government, in the most amusing government policy of the year, has announced “a ban on layoffs linked to rising energy prices in companies benefiting from aid under the plan on the economic consequences of the war in Ukraine”.

And the Americans are still busy shutting down key energy pipelines, let alone not approving needed ones.

At home, the disastrous energy price cap remains on the books and the government is coming up with energy solutions that’ll take years to implement…

Price controls and rationing are already beginning in many places around the world. And we know those only worsen the problem even more.

So, if you thought the energy crisis of 2021 was bad, just wait till you’ve given the government a year of trying to fix it!

But it’s not all bad news. The Ukraine crisis has triggered a longer term awakening on energy too. Energy security is back on top of the agenda, as is nuclear power.

The biggest change, though, is this one.

Nick Hubble
Editor, Fortune & Freedom