I’m not a doomsayer but…. The United States economy is brewing a perfect storm.
Oil prices are days away from soaring to historic level, reserves are at an all time low with no end in sight.
This will affect the cost of everything, not just at the pump. Building materials, groceries, labor, transportation. EVERYTHING.
To offset the impending inflation, the feds will increase rates. Which increases the 10 year treasury yield, causing mortgage rates to increase even more. (Likely to 8-10% on a 30 year mortgage).
Mortgage foreclosures are already at the highest levels since 2008.
And consumers can’t bear more debt, as consumer debt is at an all time high and the amount of Americans living pay check to pay check is at an all time high.
There is about to be mass defaults on consumer debt, mortgages, auto loans, which will result in businesses being closed and millions losing their jobs.
I don't understand how the market keeps going up. The DOW is up 500 today, with oil prices up over a $1.90. It doesn't make any sense.
— Cat Escalera (@EscaleraCat) September 3, 2026
American is in her car breaking down in tears over the state of our economy and our future as we get older
“I don't have a clue what is going on in America anymore, but I just came out of the Walmart — and this little lady, little old hunched over lady, was ringing me up, and I… pic.twitter.com/8PYkQTT5dW
— Wall Street Apes (@WallStreetApes) September 3, 2026
Average American family, Detroit, Michigan, 1954.
All this on a 1 income: A Ford factory worker’s wages.
What happened? pic.twitter.com/HUgwUdp6ny
— Liberta Cherguia 🇪🇺 (@MbarkCherguia) September 3, 2026
Spot on.
All Trump is doing with Bessent’s interventions are just band aids.
They aren’t long term fixes.
The bond market knows which is why yields are rising.
We need long term solutions not temporary interventions: pic.twitter.com/Soqr1LXiGn
— QE Infinity (@StealthQE4) September 2, 2026
U.S. diesel hits a record $5.82 a gallon
Diesel has risen 55% since the U.S.-Israeli war with Iran began in February. Russia’s diesel export ban remains in place through September, while Ukrainian attacks have damaged Russian refining capacity.
The timing is ugly because agricultural demand and winter heating demand are about to increase.
U.S. crude inventories fall again
U.S. crude inventories dropped sharply last week because of strong refinery activity and exports.
But here’s an important correction to the original post: U.S. crude reserves are not simply at an all-time low.
The more serious problem is the global inventory situation. EIA estimates global oil inventories fell 4.2 million barrels per day in Q2 and expects another 3.8 million barrel-per-day draw in Q3 because of the disruption around the Strait of Hormuz.
30-year mortgage rate reaches 6.71%
Mortgage rates have now reached 6.71%, the highest since July 2025.
The 10-year Treasury had climbed to 4.818% before falling back toward 4.74%.
So the mortgage pressure is already here.
But the post’s prediction of 8–10% mortgages is not something the current data supports yet. That’s a possible stress case, not the base case.
Fed officials are now split over what to do
This is where the original post gets too simplistic.
Oil inflation does not automatically mean the Fed hikes rates.
Fed Governor Christopher Waller said he could support holding rates steady in September if August inflation continues to cool. Kevin Warsh has been more hawkish.
So the Fed is facing a nasty problem:
weakening employment + higher energy inflation + rising long-term Treasury yields.
That’s much harder than simply “oil goes up, Fed hikes.”