Creak! Pop! Diesel Soars, Treasury Interventions Fail to Last, and 2027 Could Be a Very Rough Year for Food

In this Finance U podcast, Paul Kiker and I discussed the diesel situation, food issues especially for next year with the El Niño monster along with fertilizer shortages, and the Treasury intervention to drive down long rates by doubling the size of their long-dated buyback program.

It looks like the first place where a quite serious disruption is going to result from the Iran & Russian wars is in diesel product availability and pricing.

Here in good old New England, diesel prices are at all-time highs and have risen $0.78 in eleven days.

The US continues to ship out lots of diesel to the world with the most recent EIA report showing a -1.5 Mb decline in already tight US inventories of ‘distillates’ which include diesel.

The reason for the global shortage is easily seen in this chart, where an -80% decline in diesel exports from Russia and the Middle East has materialized here in August as compared to the past two years:

Maybe now that the prophecy has been fulfilled, things will begin to improve?

On the subject of food, the prices of which were already on the rise before the war (but have since picked up the pace), 2027 looks like it’s going to potentially be quite challenging..

(Source Zerohedge)

Between fertilizer shortages and the arrival of a mega El Niño, next year could be especially brutal for the world’s poorer countries.

This is a pithy and concerning video on that topic:

David Friedberg: El Niño Could Trigger a Global Food Crisis“This Science Corner is about the dreaded El Niño season that is coming up.Ocean temperatures are going to exceed anything we have seen in recent history.Why does this all matter? The reason is the oceans are the… pic.twitter.com/zdjYGHV72r

— The All-In Podcast (@theallinpod) May 19, 2026

It’s never been more obvious that everyone should have a garden and keep a deep pantry and stocked freezers.

This was also quite an interesting week in that the US Treasury (Bessent) couldn’t help themselves from monkeying around with the long end of the US Treasury market (10-, 20-, & 30-year bonds).  As Peter Shiff noted, this is sacrificing the future to make today a little bit easier for somebody (not you or me).

The Treasury already had a program of buying so-called off-the-run bonds because the market for those had gotten really stale.  It turns out nobody, myself especially, wants to buy a 10-year note yielding 1.25% or a 30-year bond offering 1.87%.

Because there was no liquidity out there, the US Treasury stepped in to ‘make the market.’  When the government issuing the paper has to make the market in that paper, that’s a bad sign.

So, the US Treasury announced they were going to double the program from ~$5 billion per month to ~$10 billion per month.

And wouldn’t you know it?  Yields on 10-, 20- and 30-year paper dropped sharply on the announcement.  Success!  Bessent did it again!

Oh, wait, that was yesterday.  Here’s today.

um, guys... pic.twitter.com/0I67Pag9jd

— zerohedge (@zerohedge) August 20, 2026

Annnnnd, it’s gone.

Well, that was fast.  This too is not a good look.  The US Treasury interventions are being undone by markets as fast as they can be announced.

Something is brewing.

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