Tag Archives: price controls

Mar 10 2026

Price Controls Never Solve a Crisis


Posted originally on Mar 10, 2026 by Martin Armstrong |  

Price Controls

Governments never seem to learn from history. Every time energy prices surge, politicians rush to impose price controls as if markets can be commanded to obey political decrees. South Korea has now joined that long list, announcing it will impose a fuel price cap for the first time in nearly 30 years as global oil prices surge due to the escalating Middle East conflict.

Crude oil has already pushed above $100 per barrel, with Brent briefly approaching $119 during the latest escalation surrounding Iran. For an economy like South Korea, which imports roughly 70% of its oil from the Middle East, the impact is immediate and severe. When the region supplying the majority of your energy enters a war cycle, the consequences ripple instantly through fuel markets, currencies, and financial assets.

President Lee Jae Myung said the government would swiftly introduce a price cap on petroleum products to protect consumers and shield the economy from the energy shock. At the same time, authorities are considering expanding a market stabilization program of roughly 100 trillion won, or about $67 billion, to contain the financial fallout from rising energy prices.

South Korea’s benchmark KOSPI index fell about 6% as investors reacted to the oil shock. The Korean won weakened toward 1,500 per dollar and bond yields pushed to two-year highs as energy costs surged across the region. Gasoline prices in Seoul have already climbed above 1,900 won per liter and have continued rising toward roughly 1,945 won in only a matter of days.

Price controls never solve the underlying problem. They simply move the cost somewhere else. Either governments subsidize the difference, which expands fiscal deficits, or shortages begin to appear because suppliers have no incentive to sell at artificially suppressed prices. The United States tried the same approach during the 1970s energy crisis, and the result was not cheap fuel but long lines at gas stations.

The deeper issue is that this energy shock is not simply a temporary spike. Roughly 20% of the world’s oil supply moves through the Strait of Hormuz, and any conflict threatening that route immediately raises global supply risk. Markets price that risk long before governments acknowledge it.

South Korea’s move highlights the vulnerability of modern economies to energy disruptions. Nations dependent on imported fuel cannot control global oil markets with administrative policies. Price caps cannot create supply that does not exist. They simply hide the inflation temporarily while the real pressures build beneath the surface. When governments begin discussing price controls and emergency stabilization funds, history suggests the crisis is only beginning rather than ending.

Feb 6 2026

Free Grocery Stores in NYC?


Posted originally on Feb 6, 2026 by Martin Armstrong

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Grocery stores in New York have devised a clever marketing tactic by preying upon the economically vulnerable. The latest example is the so-called “free grocery store” stunt in New York, which was quickly seized upon as proof that groceries can somehow be made affordable simply by eliminating prices. This is the same naïve thinking that has failed every single time it has been tried throughout history.

Polymarket and Kalshi agreed to provide free groceries for a limited time. That is not a solution; it is a publicity stunt designed to exploit public anger over the rising cost of living. The real danger is that politicians like Zohran Mamdani seize on this spectacle as justification for government-run grocery stores and price controls.

I have warned repeatedly that price controls never work, especially on necessities like food. Price is not some arbitrary number that greedy corporations invent. Price is the signal that tells producers whether it is worth planting crops, transporting goods, hiring labor, and absorbing risk.

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Every time governments attempt to suppress food prices, shortages emerge. Shelves empty. Black markets form and quality deteriorates. The Soviet Union was not plagued by empty grocery stores because of capitalism, but because price controls eliminated the profit motive that keeps supply flowing. Venezuela followed the same path, blaming merchants for rising prices while systematically dismantling production through controls and confiscation. The result was hunger, not affordability.

We are told that eliminating profit, rent, or “corporate greed” will magically lower prices. In reality, removing profit simply removes supply. When a state-run grocery store inevitably runs deficits, the losses are either covered by taxes and create large budget deficits as taxes alone are never enough to cover the promises of politicians.

Grocery inflation has been driven by energy costs, transportation, labor, regulation, , and global commodity cycles. When politicians reach for control instead of reform, they reveal that they do not understand how the system functions. You cannot repeal supply and demand with press releases or social media optics.

There is no such thing as a free grocery store. Someone always pays whether it is the farmer, the transporter, the taxpayer, or the currency itself. When governments interfere with prices, they are not helping the poor; they are laying the groundwork for shortages, dependency, and ultimately social unrest. You cannot feed the public on empty promises and failed solutions.