Well, here we are: Summer is over and it’s time for the adventures of Fall to commence. Here’s our “hot list” to ponder:
- When the diesel spike hits. Price hikes are weaving through the economy already. As the Hormuz problem slithers through, markets will snake, too. This morning the future’s call is down on overnight Saudi oil infra being “Houthi hit.”
- What the Fed will do a week from Wednesday could be a surprise in our lookahead modeling. Almost 61 percent odds of a quarter point hike, but we’re in that uncomfortable “banking meets the energy” zone.
- Before fall is out, the AI Bubble could be in trouble. Too many tradesmen and expressive “experts” are lining up on one side of the ship now. Eventually it will swamp us.
- As we have been saying almost endlessly: Get into gardening now while you can, holding your “cash close and loved ones closer.” Seat backs and tables to the upright and locked position.
The fall could be tough. Year-on-year diesel is up almost 60 percent. $5.90 low and $3.70 a year ago,
Arrival Time of Pain
It’s easy for the diesel hikes to get buried in the “holiday news,” but keep your eyes open for street-level economics to start biting.
We are likely to see shipping and fuel-surcharge hikes first — within days to a couple of weeks. After that comes the retail pass-through: groceries, building materials, deliveries, farm inputs and almost anything heavy enough to ride on a truck.
Call it days to freight pain, weeks to shelf pain, and a month or three before the economists discover it in the official numbers.
Complicating the “inflation information scene” is the quickly approaching mid-term election cycle. Mark Twain’s old say “Liars can figure and figures can lie” was incomplete. They also run for office.
Then the “diffusion process” will slap us. We’re looking for the clearest consumer-price echo from late September through November, with groceries probably toward the front of the wave. The longer it stays elevated, the less this looks like a temporary headline shock and the more it gets embedded in contracts and pricing decisions.
For software looking ahead modeling. we have marked diesel + trucking surcharge data as a 2–6 week leading channel for hard retail inflation. That’s potentially a useful bridge variable between the geopolitical ridge we’re seeing now and the economic ridge downstream.
We move into the economic ridge around next week’s Fed decision.
New Compressor: On
I’ll keep it short, but the press release from the National Federation of Independent Business could be summarized as “still hopeful…”
WASHINGTON, D.C. (Sept. 8, 2026) – The NFIB Small Business Optimism Index dipped in August to 98.7, just 1.1 points below July’s highest level since August 2025, but remaining above the 52-year average of 98.0. The Uncertainty Index fell 2 points to 89, remaining above the historical average of 68.
Now, let me lay out why “hopeful for longer” is getting risky. Starting with the Houthi attack on Saudi oil infra. Which popped in our:
News Claim-Chronology Audit
Saudi/Gulf — EVENT: Houthi missile/drone attacks struck four Saudi cities and energy-related facilities, injuring 73. ATTRIBUTION: Houthi forces claimed the operation; Saudi authorities confirmed casualties and fires; Reuters/AP independently carried the incident. VERIFICATION STATUS: attack and casualties corroborated; precise military effectiveness and claimed targets remain partly attribution-dependent. PRECEDENT DATE: September 8 is the material new widening into Saudi infrastructure.
Why it Matters: Our ongoing “nightmare escalation” would be Iran or Israel making the conscious choice to attack water sources. in some countries in region water supplies are 90% powered by oil flows via desal plants.
Lowell slinks away — EVENT: hurricane-force system passing near Kauai/Niihau with official warnings and deteriorating conditions. ATTRIBUTION: NHC/CPHC and Hawaii authorities. The problem is? With ENSO acting “out of bounds” global weather is hitting extremes. Coming next? Tropical storm Marie may head north of Hawaii, but a new disturbance is forming off Baja right now.
Ukraine — EVENT: major Russian strike resumed against Kyiv immediately following departure of U.S. peace envoys. ATTRIBUTION: Ukrainian casualty/damage statements; Russian Defense Ministry says military/logistics targets were attacked. Remember, we set a “30-day slap timer” from the CIA director’s visit to “escalation risk soaring.”
China is still winning — EVENT: August exports +25%, imports +28.2%, high-tech exports +42.9%. ATTRIBUTION: Chinese customs data reported by Reuters. VERIFICATION STATUS: official economic release; interpretation of underlying domestic strength remains analytical. PRECEDENT DATE: data released September 8. As long as oil gets through, China will worry planners like a dog with an old shoe.
Econ is War by Other Means
The yen has surged to a seven-month high as markets increasingly price a Bank of Japan hike next week. Early carry-trade unwinding and capital repatriation are amplifying the move. Tightening rapidly. This could force high-leverage players to dump out of “free money” trades.
Next driver? Oil: Brent trades through or meaningfully above $100 on additional Gulf supply-risk headlines. Odds: 64%.
The Reserve Bank of India appears to be intervening again to support the rupee as elevated crude prices increase India’s import burden. State banks were seen selling dollars around 94.70 rupees. Currency defense moves. Drive by? Energy prices…where you been?
European markets are entering a dense policy window involving the ECB and multiple inflation releases while bond yields remain elevated. Investor caution is rising despite September euro-zone sentiment reaching a four-year high. Policy uncertainty elevated.
And even gold has slipped as stronger U.S. employment and higher oil push traders toward the September Fed-hike scenario. The precious metal is being squeezed between inflation risk on the one hand and rising-rate expectations. Rate sensitivity increasing.
Other Future Pointers:
Need more? Really?
France is pressing Brussels for an EU-wide social-media ban for children under 15 after its domestic legislation was blocked. Social media cognitive impacts we’ve yammered about for years are slowly being recognized. We’ve become comfortable being a decade ahead, oftentimes.
Mistral AI has raised €3 billion at a €21 billion valuation while defending a strategy increasingly centered on integrated AI infrastructure and enterprise services. The financing reinforces Europe’s effort to retain an independent AI stack. Sovereignty buildout continuing. Are we the only ones counting “breakeven subscriber counts required”?
Around the Ranch: Another Book Done
Should be able to serve it tomorrow on the Peoplenomics side of things.
This has been a fascinating book to crunch out. Deals with AI and how that will impact the world over the next half-dozen years, or so.
It also put a key economic lesson into perspective. Though first, I need to explain, that it helps to be a domain walker in how you view the world. Most people are “single domain” in their thinking. There’s an undifferentiated ball of “stuff” that we (carbons) use to feel our way along through life.
Domain walkers, by comparison, use a more advanced “mental filing” system. They link everything as it comes along. The human-computer analog is “most people are database “flat-filers” while domain walkers are “relational filers.”
(George holds up his hand, indicating a break point in the conversation or he would get way deep into the weeds here.)
The lesson in TFA is simple (and terribly painful).
In the Great Depression the ultimate-engine of mass repricing (and the subsequent inflation) was machine production. The total cost of LABOR collapsed.
In (what’s coming – which is about to crystallize, I think as a Second Depression – will be the deflationary impacts of machine thinking. This is where the cost of THINKING collapses.
And so – what we can begin to model ahead – is how people who were hit hardest in the First Depression (which were factory worker/laboring sorts) – will actually fare better in what’s to come than the thinking class of people. That’s where the AI damage will be.
Oddly, it won’t be a specific “fault” of AI. It’s just that MONEY is an enormously erosive force. It wears down costs wherever they are found and monetizes its replacement.
So, what we’re seeing in the AI Mania Buildout Phase seems likely, in my view, to set up the THINKING CLASS DEMISE – which may come as a terrible shock to people in finance, medicine, law, accounting, and so forth – when it gets here.
The key to watch for will be the rate of ERP adoption and integration into AI offerings.
The scenarios and the frosting to this framework is free tomorrow on the Peoplenomics subscriber side. Oh, and just to make it interesting, it will also include the complete book as three MP3’s.
Interesting workflow there: Used Grok Orion tools and under their ToS as long as I mention that’s the tool, then it can be shared. Which is yet-another chipping at people like me – who once made a lot of side cash doing voice-overs back in my radio days.
My how tech turns the wheels of society, huh?
From the Lab – Humor
When a new package of RAM cards shows up this week, we will be ready to launch a small LLM under Linux (Mint). My “big box” AI “Walter” will soon be able to talk (working on the mechanics of this) to the lite AI “Victoria.”
And yes, the “secrets” is implied.
dmidecode already showed two 4 GB sticks, so Victoria’s lift is a pair-swap, not a mystery. After free -h shows ~14–15 Gi, the first useful job for her will be outline-and-tag, not conversation. So if someone asks “What is Victoria’s Secret? The correct answer is now “Old 204 pin SODIMMs.”
This will either generate a patent I have in mind. Or, it might become a book, “When Walter Met Victoria”.
Write when you get rich,
George@Ure.net