Between August of 2021 and August of this year 2022, electricity prices rose 16 percent; that's
nearly twice the rate of inflation of goods and services. And this is extremely important, because
if you raise the electricity price this much, you're going to raise the price of everything
else. Because, everything that's produced is produced in a factory, an office, or a space
that is lit by electricity, runs by electricity, heated mostly by electricity etc. etc. We're
at the beginning, therefore, of watching this rapid increase work its way through the economy.
Message: inflation not going anywhere real soon Jack. Why is this happening? First of all,
it is not happening because of the war in Ukraine in any direct way. Military incursion in Ukraine
by Russia [and] fighting between Russia and Ukraine is an awful experience, is an awful event,
but by itself would not have much impact on our electricity costs. So, what's going on? Answer:
in retaliation to Russia invading Ukraine, the United States led the European countries places
like France, Germany and all the rest in going into economic warfare called applying sanctions
to Russia. The Russians, smiling, said "Well, we're not going to accommodate your sanctions
against us to your schedule. If you're going to sanction us, we're going to count sanction you
back and here's what we're going to do. We're not going to ship you oil and gas at all. That's our
schedule because we don't need you." Whoa. The Europeans discover they need Russian gas badly.
But now, there's a shortage of Russian gas, and the price goes crazy in Europe because you can't
get it. Price goes up for oil too, but there are ways around that. Gas comes in a pipeline
from Russia. There's no quick way to get around that, so the price of gas goes crazy in Europe
because it's a shortage. What do American gas producers do? They say, "We're not selling our
gas here in the United States because the price hasn't gone crazy. We don't need Russian gas so
our prices are low." Yeah, but if you're a gas seller, you don't want to sell where the price
is low. You want to sell where the price is high. So, American gas producers are producing gas all
right and sending it to Europe, usually in the form of what's called liquefied natural gas,
where they get much more money. Well guess what? Then there's a shortage of gas here in the United
States because we're sending it to the Europeans because of the sanctions they put on Russia.
Almost half of the electricity produced in the United States is produced by burning gas. And
as the American gas producers ship their gas to Europe because it's profitable for them,
more profitable to do that, the price of gas is going up here. How far has it gone up? Get
ready folks... 70 percent over the last year. 7-0. That's the increase in the wholesale price of gas.
We're only seeing a 16 percent increase in electricity- not because we're not going to
see more, we are. But it takes time. You see in every one of the 50 states, we have a commission.
It's called the utility commission, and if you're an electricity producer, you have to prove to
that commission that you need a price increase and that you're not ripping everybody off. You
know why we have those 50 commissions? Because all the utility companies were ripping everybody off,
and in response, we hit them with a commission. That's American capitalism in case you forgot the
history. So, it's taking time for the electric companies to get the hearing in front of the
commission to show them that with the rising price of the gas they need to charge people more. So,
some of them have done it, and so the price is already 16 percent higher. But with the wholesale
price of gas 70 percent higher, guess what? The sanction program that was intended to hurt the
Russians is having a blowback problem. Russian electricity hasn't gone up this way. They have
loads of gas and oil because that's what they were exporting. And the cost of this sanctions program
is getting bigger and bigger and [is] really going to whack the United States, as it already is.