Alright, I got a setting that I seem to have forgotten for some reason crafting any item results in destroying the resources needed to create it as if the difficulty level had been increased but wasnt? any script or directory I should be looking into?

Have you tried lookin in pol\pkg\skills\blacksmithy\makeBlacksmithItems.src ?
The last function "makeBlacksmithItems" contains a couple of "SubtractAmount" calls which reduces player resources. Is that what you were after?