The Producer Price Index for May came in far hotter than expected, rising 1.1% for the month and 6.5% year-over-year, the largest annual increase since late 2022. What is important here is that nearly 80% of that increase came from goods, and energy was the driving force behind the move. Gasoline prices at the wholesale level surged more than 23% in a single month. Diesel fuel, jet fuel, natural gas, industrial chemicals, plastics, and transportation costs all moved sharply higher. This is exactly why I have repeatedly stated that energy is the lifeblood of the economy. Everything must be manufactured, transported, and delivered. When energy prices rise, they eventually work their way through the entire system.
The press continues to focus on consumer inflation, but wholesale inflation is often the more important indicator because it reveals what businesses are paying before those costs are passed on to the public. Companies absorbed much of the inflation shock over the past several years because consumers had reached their breaking point. That cushion is disappearing. Businesses cannot continue absorbing rising fuel, transportation, and raw material costs indefinitely. The result is that the inflation consumers are experiencing today is likely only the first stage of a broader wave working its way through the economy.
The politicians will blame corporations, speculators, or anyone else they can find, but the source of this inflation is staring everyone in the face. The conflict in the Middle East has disrupted shipping routes, threatened the Strait of Hormuz, and created uncertainty throughout global energy markets. Oil remains the foundation of modern civilization whether governments wish to admit it or not. The dream that governments could simply regulate away fossil fuels while simultaneously fighting wars was always detached from reality. Energy shortages and rising costs are now exposing the consequences of those policies.
What concerns me is that we are entering a period where inflation, war, and sovereign debt problems are converging at the same time. The Federal Reserve cannot solve an energy shortage with interest rates. Raising rates will not create more oil, open shipping lanes, or end geopolitical conflict. Meanwhile, governments continue spending as though debt no longer matters. The May PPI report is not simply another inflation statistic. It is a warning that the energy crisis is spreading through the economic system and that the inflation battle is far from over. As we move deeper into this Panic Cycle year, volatility in commodities, interest rates, and global capital flows should surprise no one.
UK Defence Secretary John Healey suddenly resigned because the government cannot find the money to fund military commitments. In his resignation letter, he openly accused Prime Minister Keir Starmer and the Treasury of refusing to commit the resources needed to defend the country at a time of rising geopolitical tensions. When a defence minister quits claiming the government cannot adequately fund national security, that is a warning sign far beyond politics. It is a signal that the financial reality has finally collided with political promises.
Britain’s economic condition is far worse than many appreciate. Government debt has climbed above £3 trillion, exceeding 100% of GDP. Interest payments on that debt have become one of the largest items in the national budget. The tax burden is at its highest level in decades, yet the government still cannot balance the books. Economic growth has been stagnant for years. Productivity growth has virtually disappeared. Manufacturing continues to shrink as a percentage of the economy while energy costs remain among the highest in the industrialized world. Britain now spends more servicing debt than it does on many essential public services. The government talks about expanding defence spending, expanding social programs, funding green initiatives, supporting Ukraine, and maintaining the welfare state, yet the numbers simply do not add up.
The dispute centers around Britain’s Defence Investment Plan. Healey reportedly wanted at least £18 billion in additional military funding through 2030, while military officials have warned of a £28 billion shortfall over the next four years. Instead, the proposed spending plan would only raise defence spending to roughly 2.68% of GDP by 2030, well below what military planners believe is necessary given the commitments Britain has made around the world. The government delayed the plan for months because the Treasury could not find the money.
Britain is trying to maintain global military commitments on an economy that has been steadily weakening for years. Governments always expand obligations during periods of prosperity and then discover during economic decline that they cannot afford the promises they have made. Britain wants to project military power from Eastern Europe to the Middle East, lead NATO initiatives in the Arctic, support Ukraine indefinitely, and modernize its armed forces, all while carrying massive debt burdens and facing weak economic growth.
The resignation of Healey exposes a much deeper problem. Britain is no longer debating how much it wants to spend. Britain is confronting the reality of how much it can afford. As we move deeper into the sovereign debt crisis unfolding across the Western world, more governments will face this same dilemma. They will discover that geopolitical ambitions are ultimately constrained by economic reality, and economic reality is becoming increasingly difficult to ignore.
People have become so conditioned to thinking in partisan terms that they miss the larger issue entirely. The question is not whether Bill Gates is a good person or a bad person. The question is why one individual continually appears at the center of industries that later become critical during periods of crisis.
Bill Gates became one of the most influential private figures in global vaccination programs long before COVID. Through the Gates Foundation, billions of dollars have been directed into vaccine development, distribution, and organizations such as Gavi. The foundation has committed more than $4 billion to Gavi alone over the years and remains one of the most influential private actors in global vaccine policy. During COVID, the Gates Foundation committed hundreds of millions more toward vaccine development, manufacturing, and distribution worldwide. Nobody can seriously dispute that Gates became one of the most powerful private forces in the vaccine industry. Yet when a global pandemic arrived, suddenly vaccines became one of the most profitable and politically protected industries on earth.
Then there is agriculture. Bill Gates spent years quietly acquiring farmland across the United States until he became America’s largest private farmland owner, accumulating roughly 250,000 to 275,000 acres spread across numerous states. While many dismissed concerns by arguing that farmland is simply another investment, the timing remains extraordinary. Food inflation exploded. Supply chains broke down. Fertilizer shortages emerged. Farmers found themselves squeezed from every direction. Food security suddenly became a national discussion. Once again, one individual sat at the center of a strategic industry during a period of crisis.
Now consider infant nutrition. Gates-backed investment funds supported BIOMILQ, a startup attempting to produce human breast milk in laboratories using cultured cells. This was not science fiction. It was a real venture designed to create lab-produced breast milk as a commercial product. Around the same period, America experienced one of the worst baby formula shortages in modern history. The shortage stemmed from manufacturing disruptions and supply chain failures coincidentally tied to COVID.
Gates infamously speaks on controlling the population. “If we do a really great job on new vaccines, health care, reproductive health services, we could lower that [population growth] by perhaps 10 or 15 percent,” he stated. When an influential billionaire who funds vaccine programs and bankrolls the World Health Organization buys vast amounts of farmland, finances alternative food technologies, and speaks about managing population growth all at the same time, people are going to ask questions. You cannot expect the public to ignore those connections.
The establishment immediately labels anyone who notices these patterns a conspiracy theorist. That is how debate is shut down before it begins. Yet concentration of power has always been a legitimate concern. When banking became concentrated, governments eventually regulated it. When railroads became concentrated, governments intervened. When media became concentrated, concerns emerged over influence and control. Why should food, medicine, agriculture, and biotechnology be treated differently?
The same people who finance vaccines finance health policy. The same people buying farmland finance agricultural innovation. The same investors funding synthetic food products dictate the future of nutrition. All distinction between private influence and public policy has disappeared.
What concerns me is where this trend leads. We are moving toward a world where food production, healthcare, biotechnology, artificial intelligence, digital identity systems, and financial systems are increasingly controlled by a shrinking circle of institutions and individuals. That concentration creates systemic risk. If they are wrong, everyone suffers. If their interests diverge from the public’s interests, society has few alternatives.
History warns that whenever too much influence accumulates in too few hands, the public eventually pays the price. The issue is the system that allows any private individual to become influential across so many strategic sectors at the same time. That is the lesson people should be paying attention to, because concentration of power has never ended well, regardless of who holds it.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
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