Collapse Widens

Added: 2026-05-11

[00:00:00]Hi, welcome back to the channel. In today's episode, I want to talk to you about the ongoing impact of the war in Iran and specifically to talk about what's happening with consumers because we're now hearing from some of the biggest companies in the world that they are seeing real problems with their sales. We'll also talk what's happening with the price of fuel at the pumps, the fact that the war now looks to have recommenced despite all of the talk about a ceasefire, and why I think the stock markets are currently giving everybody a false sense of security about the real state of the global economy. Because underneath all of the headlines about artificial intelligence, tech stocks, and record highs, something much more serious is now happening in the real economy. Consumers are running out of money. Inventories are collapsing. Oil prices remain massively elevated. And the damage is now starting to show up everywhere from restaurants to airlines to retail. And the really worrying part about all of this is that we still haven't yet seen the full impact hit corporate earnings. But before we get into the details on all of this, could I ask anybody that hasn't subscribed yet to please hit that subscriber button? It really does help me with the algorithm and also puts a smile on my face. So, let's start with what's happening right now in the Middle East. Because despite all of the headlines suggesting that a ceasefire agreement was holding, fighting has clearly recommenced. Over the last 48 hours, we've seen a significant escalation in the tension around the Strait of Hermuz with both the United States and Iran accusing each other of launching attacks first. The US military claims that Iranian drones and missile systems targeted American naval assets operating in the Gulf region and that US forces responded in self-defense. Iran, however, is claiming the exact opposite, accusing the United States of violating the ceasefire by carrying out aggressive strikes against Iranian territory and military infrastructure. And this wasn't just a minor exchange of fire. According to reports, US forces carried out strikes against Iranian radar installations, missile launch facilities, and military sites close to Bandar Abbas, which is one of Iran's most strategically important naval locations. There were also reports of explosions on Quam Island and further military activity around coastal defense systems linked to Iran's Revolutionary Guard. At the same time, Iranian drones were reportedly intercepted over Gulf shipping lanes, whilst commercial vessels operating close to Hammuz were forced to alter routes due to renewed security concerns. And this is hugely significant because 20% of the world's oil supply is meant to pass through that straight every day. Obviously, it isn't at the moment. So every time there's renewed fighting in the region, global energy markets immediately panic because the fear is not just about current supply disruption, it's about the possibility of a much larger escalation that could seriously impact global oil flows. And that's why oil prices have once again surged back above $100. Now, one of the things that I find really interesting about all of this is the way the media reports the short-term movements in oil prices. Every time there's a rumor of peace talks or a possible ceasefire, you suddenly get dramatic headlines saying things like oil slump 7% or oil tumbles on ceasefire hopes. But you have to zoom out and look at the bigger picture here. At the start of 2026, oil was trading for around $60 per barrel. Today, it's above $100. So even if prices fall 5% or 7% temporarily, the reality is that oil prices are still more than 50% higher than they were just a few months ago.

[00:03:43]And that massive increase is now starting to crush consumers and businesses all over the world. One of the clearest signs of that is what's happening at the fuel pumps in the USA.

[00:03:53]According to the American Automobile Association, average gasoline prices in the US are now at $4.56 per gallon, which is the highest level since July 2022, shortly after Russia invaded Ukraine and energy prices spiked globally. And this is now having a direct impact on consumer behavior.

[00:04:14]Because if households are suddenly having to spend dramatically more money filling up their cars, then they've got less disposable income available for everything else. And we're now hearing warnings from some of the biggest companies in the world that consumers are reaching breaking points. The chief executive of Craft Hind said that consumers are now literally running out of money at the end of each month. The McDonald's CEO warned that confidence among shoppers isn't improving and may be getting worse with the company specifically highlighting heightened anxiety around fuel prices and the disproportionate impact that gasoline costs are now having on lower income consumers. The CEO of Dine Brands Global, which owns Applebee's and IHOP, said, "Our price sensitive, more valueorientated guests seem to be staying at home a bit more." And that's exactly how economic slowdowns begin.

[00:05:05]People cut back gradually at first.

[00:05:07]Maybe they skip eating out. Maybe they delay purchases. Maybe they cancel a weekend away. Maybe they stop buying little luxuries. And then eventually the slowdown spreads throughout the whole economy. Eyewear retailer WBY Parker said younger consumers are increasingly struggling due to higher unemployment and ongoing burden of student debt repayments. Planet Fitness saw its shares fall at the fastest rate on record after the company cut its fullear outlook because member signups were significantly weaker than expected during what is normally one of the busiest periods of the year. The gym chain even paused a planned national price increase because management became concerned about weakening economic backdrop. And the CEO summed it up perfectly by saying the consumer and economic backdrop have shifted. And I think that sentence really captures what's happening globally right now.

[00:06:00]Because underneath all of the excitement around AI stocks and technology shares hitting record highs, the real economy is starting to weaken. Consumers are under pressure. Businesses are becoming nervous. Inventories are collapsing.

[00:06:15]Fuel prices remain extremely high. And all of this is happening before we've even seen the fullear impact show up in corporate earnings. Reuters reported this week that global oil inventories have already fallen dramatically as countries have been forced to draw down stockpiles to keep economies functioning. And analysts are now warning that the situation could actually worsen even if the conflict ended tomorrow, which looks unlikely because supply chains don't magically restart overnight. Shipping routes remain disrupted, tankers are delayed, ports are congested, refineries have been damaged, and there are now major logistical problems across the global energy system. Some analysts believe that hundreds of millions of barrels of inventory have already been lost from the system and that the total could rise substantially higher before things finally stabilize. At the same time, US gasoline inventories are now at their lowest level since 2014. Singapore's oil inventories have also dropped sharply and governments around the world are now increasingly concerned about future supply security. And this is where the multiplier effect starts to become really dangerous. Higher oil prices increase transport costs that pushes up prices for food, goods, and services.

[00:07:33]Consumers then cut spending elsewhere.

[00:07:36]Businesses see weaker demand. Profits come under pressure. Investment slows, hiring slows, and eventually unemployment starts to rise. And once unemployment rises, the whole cycle starts feeding on itself. And I think this is where the stock market is currently disconnected from reality.

[00:07:53]Investors are focusing heavily on artificial intelligence and future productivity gains. And maybe long-term that optimism will prove correct. But in the real economy today, right now, consumers are hurting. Restaurants are seeing weaker footfall. Retailers are becoming nervous. Airlines are under pressure. Tourism is slowing. and businesses are increasingly warning that lower income consumers are struggling badly. And the really important point here is that we still haven't yet seen the fullear impact on all companies because the next few quarters are going to include the prolonged period where oil prices have remained elevated above $90 and in many cases above $100 per barrel. We've now had $90 plus for 60 days. So I think the next wave of corporate results could look significantly weaker. And if oil prices remain elevated through the rest of 2026, then I think we're going to see significant damage spreading throughout the whole of the global economy. Because this isn't just a problem for one country. It impacts Europe. It impacts Asia. It impacts emerging markets. It impacts tourism. It impacts trade. It impacts inflation. It impacts interest rates. And it impacts consumer confidence. The longer this conflict goes on, the bigger the economic damage will become. And even if a peace agreement is eventually reached, the effects are likely to linger for months because supply chains, inventories, and consumer finances have already taken a major hit. So whilst financial markets may currently be celebrating every rumor of a ceasefire and every temporary dip in oil prices, I think the underlying reality is becoming increasingly worrying. And I think over the next few months, we're going to start seeing much clearer evidence of that in economic data and corporate earnings. So, I'll keep you posted on any further news and developments as and when they occur. But hopefully you found today's video useful, informative, and most importantly, thought-provoking. There's now only 30 days left on my competition to win my property or a cash alternative prize. So, if you haven't already got involved, now is the time to do it. I'm offering some really great deals, the best deals I've ever offered. So, you can get lots of free tickets if you buy a ticket. Scan the QR code on the screen now or click the link in the description below if you'd like to get involved.

[00:10:06]It's another way of funding the channel.

[00:10:08]Thank you so much to everyone that's supported me in other ways. If you've bought me a coffee or sent me a YouTube super thanks or signed up as a patron or a member, thank you for that support.

[00:10:16]Really does help to keep me motivated. I really appreciate it. Just wanted to remind you that I've set up a new channel called Joe Blogs Russia, which is going to have all of my Russian videos on there. So, this is really for anybody that's not interested in the variety of content that I'm now posting on this channel. So, if you don't like food and travel and all of the other things, please jump over there, sign up, join as a member, watch some of the videos, there's a link at the end of today's video. It will take you through to one of the old Russian videos. Please go on to that and then you'll see that there's a playlist on there. If you could click on that playlist and let it run on your device, that would be fantastic because I need to build up 4,000 watch hours and I'm still a bit short of that. So, if you could help out, then that'd be great. Once I'm through that, I'll post all of my new Russian videos onto that channel, as well as posting them here as well for people who don't want to watch just Russian videos. Also wanted to remind you that the Joe and Naz channel is now live. We're bringing food, fun, pubs, and banter to YouTube. I think you're going to enjoy it. It's a bit of light relief, bit of fun. There's a lot of interesting stuff in there as well. It's entertaining. Hopefully, uh, you'll help us out because we're early days. We need your support. We've still only got a small number of subscribers. We're not getting a lot of views. So, there's a link at the end of today's video for that one as well. So, if you could click on that, go and watch the Joe and Naz videos uh and just help us out a little bit, I would really appreciate it. It will put a smile on your face. And here is something else that will do that as well.

[00:11:47]What you know I was like I said Oh my god.