The following contains editorial which is the opinion of the writer.
ACROSS THE GLOBE- For anyone with eyes wide open, the last two years have proven extremely difficult, if not untenable.
As a piece in Red Wave notes, the events we’ve seen have “perfectly set the stage for a global economic collapse of unprecedented size and scope.”
How so? Inflation, which just hit a 40-year high in the United States has affected not only our country but has spread globally.
The supply chain crisis is the worst seen on a global basis since World War II and shows no signs of improvement, while much of the world’s population is barely able to scrape by on a month-to-month basis. The world is, in a word vulnerable, more so than we have seen in decades.
The author speaks to a survey which has shown that even in the greatest country in the world, a significant portion of the population is truly on the brink of economic disaster.
Like the game Jenga, moving one piece out of place can bring the whole thing crashing down, and that is no way to live life. That survey shows that seven out of ten Americans are currently living paycheck to paycheck.
The survey of 2,007 adults found 63 percent of Americans don’t believe they can reach a level of financial security which will give them the opportunity to live the lifestyle they want.
One might think that with the flush of cash that has been dumped into the American economy over the past few years that Americans may have a financial cushion to fall back on. That couldn’t be farther from the truth, as more than two-thirds of the American people are living paycheck to paycheck.
While things appear to be pretty bad, could they actually get worse? Some experts seem to think so. And much of that is tied around the global supply chain.
Jeff Currie, head commodity strategist for Goldman Sachs admitted the world is in the throes of shortages in virtually all major commodities, according to ZeroHedge:
In a time when social networks have been swamped with photos of empty shelves from across the nation, Goldman’s head commodity strategist and one of the closest-followed analysts on Wall Street, said he’s never seen commodity markets pricing in the shortages like they are now.
“I’ve been doing this 30 years and I’ve never seen markets like this,” Currie told Bloomberg TV in an interview on Monday. “This is a molecule crisis. We’re out of everything. I don’t care if it’s oil, gas, coal, copper, aluminum, you name it, we’re out of it. [emphasis added]
“You name it, we’re out of it.” Chilling.
According to the opinion piece, despite what Joe Biden and Pete Buttigieg and Jen Psaki say, this is not a temporary glitch in the global supply chain. This isn’t merely a bunch of cargo ships being held out in the Los Angeles or Long Beach harbors. It “is the beginning of a global supply chain collapse.”
Why is this occurring? For one thing, there is way too much money (much of it printed out of thin air) chasing too few goods and services. That is spiking inflation at an unbelievable pace and on a daily basis, the news seems to get worse.
As an example, the article cited that despite the prices of meat already being up significantly, it is poised to increase once again, as Tyson Foods recently announced another price increase.
The company’s stock recently hit an all-time high, and the company has been one of the S&P’s best performing stocks recently.
ZeroHedge reported:
“…after the company reported blowout earnings (thanks to passing on surging food prices) and announced that it is raising prices even more as it grapples with a tight labor market and smaller livestock herds. According to the report, beef prices jumped by 32% in the quarter, with chicken up 20% and pork 13%. [emphasis added]
America is hardly alone, as similar issues are being reported around the globe.
For example, British news sources say that the economy in Germany “is in freefall” and that “devastating” price increases are significantly impacting consumers in that country.
It’s only a matter of time, Red Wave says, before “the other shoe drops.” What would that “shoe drop” mean?
Some Americans are preparing for the inevitable, and according to an article in the Wall Street Journal, a number of Americans have begun to engage in “hoarding”…
Alexis Abell recently walked out of a BJ’s Wholesale Club outside Buffalo, N.Y., with 24 boxes of Kraft Macaroni & Cheese, a box of 50 frozen mozzarella sticks, a 40-pound bag of basmati rice, and a 12-can pack of garbanzo beans.
“I don’t want to be in a position again where I can’t get something,” says Ms. Abell, a 41-year-old mother of five, who was laid off from her retail job at a quilt shop in 2020 and decided not to return to work.”
Hoarding? Possibly. Smart? Definitely.
As the author wrote, some people expect the government to bail them out whenever the you-know-what starts to hit the fan.
As he has previously written, the American people aren’t the only ones who are ill-prepared, so too is the federal government. He noted that the feds have “very limited amount of food, water, and generators” at the “eight widely scattered FEMA distribution centers” across the USA.
We have already seen how ill-prepared the federal and state governments were for the coronavirus, with little in place to handle a pandemic even after the H1N1 epidemic of the early 2000’s should have been a warning.
The federal government purchases small amounts of food (in the grand scheme of things) which it distributes generally through foreign aid programs. Were a significant emergency to strike, the federal government is ill-prepared and would go through whatever resources they do have quickly.
But don’t think the global elite don’t have a plan. Know-it-all’s such as Bill Gates of Microsoft and other oligarchs (who don’t have to worry about supply chains) realize the food chain is going to dry up, which is why you hear a lot these days about bug protein becoming a significant part of our diets. Seriously.
As Red Wave notes, the time is coming—perhaps rapidly—when the average person won’t be able to afford to eat meat on a regular basis. What will happen when that day arrives? Will things ever return to normal? It’s best to prepare now in case in fact that never happens.
The author of the piece, Michael Snyder, has a new book entitled “7 Year Apocalypse” now available on Amazon. Looks like important reading.
For more on the issues affecting the supply chain, we invite you to:
DIG DEEPER
UNITED STATES – According to reports, factory production “unexpectedly” declined in December 2021, which also means that an increase in COVID-19 infections further adversely affected manufacturers’ issues with material and labor shortages.
Bloomberg reports that Federal Reserve data showed a 0.6% gain in factory production in November 2021, followed by a 0.3% decrease in factory production in December 2021.
Total industrial production, including “mining and utility output,” dropped an additional 0.1% in December of 2021.
According to Breitbart, that 0.3% decrease in December 2021 was quite a surprise drop that was far short of the forecasted 0.5% gain in factory production.
Supply constraints just got even worse, suggesting more inflation ahead. https://t.co/dYhd54aU2E
— Breitbart News (@BreitbartNews) January 15, 2022
One significant lag was found in the auto industry. Breitbart reports that the index for motor vehicles and parts dropped by 1.3 percent in December of 2021, which was 6 percent lower than the level from a year ago.
Part of that auto industry problem, Bloomberg adds, was the semiconductor shortage which affected vehicle assembly. In addition, there were less available “fabricated metals, aerospace equipment and plastics.”
The ugly hand of COVID has firmly inserted itself into the production arena. Bloomberg reports:
“The omicron variant is just the latest hurdle, as factory floor managers navigate the fallout of the spike in cases on workers and production schedules.
“Challenges related to transportation networks and various materials shortages are also hampering efforts to boost supply.”
Even with that, Bloomberg notes further, “lean inventories, elevated order backlogs and sustained growth in consumer and business demand are poised to offer a tailwind to production this year.”
Stephen Stanley, chief economist at Amherst Pierpont noted:
“I suspect that some industries may have been forced to slow down activity in the second half of the month due to omicron-driven absences.”
Stanley continued:
“In any case, manufacturers will look to get back up to full speed as soon as they can in light of robust demand for goods from consumers and businesses.”
Other significant statistics include a drop in capacity utilization, or the extent to which a company uses its manufacturing and productive capacity. Capacity utilization fell in December by 0.2%, to 77%. In addition, capacity utilization for finished goods also dropped 0.2%, to 76.9%.
Moreover, Breitbart notes that overall industrial production, including factory output, mining, and utilities, dropped for the first time since September 2021, with a decrease of 0.1 percent.
Furthermore, the outlet reports that “mild weather” led to a drop in utilities output of 1.5%.
There was actually an increase of two percent in mining output, “likely driven by increased demand for oil and natural gas.”
There is some slightly good news in terms of supply networks, according to Bloomberg:
“Recent factory surveys have pointed to some alleviation in stressed supply networks, with measures of supplier delivery times improving.
“Institute for Supply Management data earlier this month showed a gauge of manufacturing delivery times dropped to its lowest level in more than a year.”
Think things are awful now? Just wait. U.S. factory production suffered a sharp and unexpected downturn in December, a development that is likely to add to inflationary pressures in an economy beset with supply constraints. https://t.co/lPs4DrtUIv
— Breitbart News (@BreitbartNews) January 16, 2022
However, Breitbart’s analysis of the production and utilization figures features a rather grim outlook for inflation ahead.
John Carney wrote:
“The drop in manufacturing production and utilization in December is particularly troubling because the surge in infections due to the omicron variant of the coronavirus occurred only toward the end of the month.
“It is likely that high rates of infection and quarantines will result in many workers having to stay home for several days in January, which could further weigh on production.
“That would likely raise inflation higher than it would otherwise be.”
Experts warn global economy heading for “mother of all” supply chain issues as China locks down
Originally published January 15, 2022
The content contained herein contains editorial commentary which is the opinion of the writer.
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Over the past few months, we have seen bare store shelves courtesy of supply chain issues. Many have warned for years that the United States was vulnerable as our manufacturing left our shores and went overseas.
For four years starting in 2017, former President Trump was attempting to bring manufacturing back home. Unfortunately, that was derailed after Trump lost last November’s election.
Aside from the supply chain issues, ZeroHedge that another issue may haunt the United States.
They note that over the past several weeks, Wall Street has become optimistic on US growth going forward, along with the Fed, that despite economic numbers continually showing the opposite.
That optimism has led the Fed to signal interest rate hikes, maybe as soon as March.
Alarm bells have been ringing however after the Fed last year stated the belief that inflation was only “transitory,” which turned out to be a fallacy. Current indications are we are in this for a while.
ZeroHedge warns that the Fed is poised to make not one more mistake but possibly several more—up to four—by hiking interest rates that number of times.
Combined with trying to pay off a “massive balance sheet,” all of this comes as growth on a global scale is slowing dramatically.
The Fed is going from one huge error (inflation is transitory) to another huge error (4 rate hikes and runoff won't crash markets).
— zerohedge (@zerohedge) January 11, 2022
The one place beside the United States where a growth slowdown could prove especially troubling is in China.
Taken in combination with a deterioration in US consumption, and increased use of credit cards is helping to support current funding and is due for a “bubble,” we now have China, pursuing a “covid-zero” policy as well as looking to lockdown ports, again due to covid.
All of this, ZeroHedge reports spells big trouble.
Once a lone voice warning of China’s impending Covid-zero policy, now Bloomberg is joining in on warning that restrictions implemented by Beijing “are starting to hit supply chains in the region.”
As Bloomberg warns, the world economy could be headed for the “mother of all” supply chain issues.
Over the past several weeks, the omicron variant of Covid has been spreading across the United States, with a record number of Americans testing positive for the variant this week on at least one day.
Bloomberg reports that if the variant spreads across Asia, China in particular, it would result in a significant disruption in manufacturing. HSBC economists this week wrote that the disruption would be “temporary, one would hope, but hugely disruptive all the same” in the next few months.
As is, movement of goods through some of the busiest and important ports have seen shipping traffic slowed significantly, with a number of shippers now diverting to Shanghai.
It was bottlenecks such as these which eventually led to hundreds of container ships waiting off the coast of California to unload, a situation which still continues to this day.
For example, in November, there were some 80 ships offshore waiting to unload, while as of Jan 6, there were 105 ships waiting.
ZeroHedge reports that sailing schedules are already facing delays of about a week, which has freight forwarders warning of the impact on already clogged gateways both in the United States and Europe.
Last year, China locked down its ports for several days, which led to what ZeroHedge calls “an unprecedented hiccup in global logistics and shipping” which exists today.
Omicron has had relatively little impact in China compared to the West, but of course that is dependent on China actually giving accurate information. That said, Chinese officials are being cautious in order to reach their desire of zero Covid.
Scattered infections in China of both the delta and omicron variants have already seen China shut down clothing factories and cease gas deliveries in the vicinity of one of China’s largest seaports, Ningbo.
In addition, disruptions have occurred at computer chip manufacturers in Xi’an and a city-wide lockdown in Henan province Tuesday, ZeroHedge says.
Bloomberg says that any continued increases in cases in that region, it could impact the supply of iPhones and other smartphones, Bloomberg Intelligence analysts say.
Covid zero, which given the transmissibility of the omicron variant seems like a fool’s errand, yet it is something the communist nation is pursuing.
While such a policy helps to contain virus spread to a degree, it causes significant disruptions and lockdowns while officials limit the movement of people.
Repeated mandatory testing of whole cities, for example, disrupt business and production, yet the issue is nowhere near as bad as currently exists in the United States, where last week some five million people stayed home sick.
However, the news from China isn’t encouraging, with some predictions saying that China’s covid outbreak this winter could be worse than last year.
Also, the number of new cases has been larger this year in the country, and the provinces hit by the outbreaks this year also have a higher GDP and population density.
Bloomberg noted that a number of companies are attempting to mitigate their risk by looking at alternative production facilities, according to Stephanie Krishnan, a supply chain expert at IDC in Singapore.
“We are starting to see companies mitigating risk, seeing where they can increase capabilities for production of different products in different factories so they can shift that around,” she said.
Krishnan also warned that there isn’t currently any light at the end of the tunnel, saying she doesn’t see an end to the global supply crunch anytime soon. She further cautioned that it could take several years for the current supply crunch to unwind.
This is a contrast to the optimism that many felt about the new year, hoping the so-called “Big Crunch” would be winding down, a situation which plagued both producers and consumers for much of 2021.
China’s ability to control the virus will be absolutely critical, said Deborah Elms, executive director of the Singapore-based Asian Trade Centre.
She noted that companies who don’t have supply chains centered in China may be able to avoid issues relative to China’s covid mitigation strategy.
Unfortunately, that won’t apply to everyone and certainly won’t apply to the United States, which relies heavily on China for a lot of our goods.
“Lots of products in supply chains come from outside China,” Elms said. “Given challenges elsewhere, even zero Covid doesn’t solve all the issues of disruption.”
ZeroHedge notes that all of this will make the job of the Fed extremely difficult in the coming months. A rise in interest rates is seen as a hedge against inflation, however as ZeroHedge notes, much of the inflation today is being generated on the supply side.
However, if there is a “surprise” drop in growth in the next few months, the Fed will have to delay or stagger its tightening strategy.
If they time this incorrectly, they would be hiking interest rates into a recession which will mean they would have to revert to easing again. This is referred to as a “bull-whip” effect.
LONG BEACH, CA- Let’s just call the Biden administration thus far “Nine Months of Crises.” With this guy, it’s literally been one cluster f*ck after another. Worse yet, this administration doesn’t appear to have a plan.
The current crisis finds hundreds of container ships stranded outside ports in Los Angeles and Long Beach, California and New York and New Jersey on the east coast.
On Tuesday, the White House told Reuters in an interview that Americans should be aware “there will be things you can’t get” in time for Christmas, as the latest Biden blunder is causing supply chain issues across the country.
Refusing to accept accountability for anything, the unnamed official Reuters spoke to merely suggested Americans might want to purchase goods that are available.
“At the same time, a lot of these goods are hopefully substitutable by other things […] I don’t think there’s any real reason to be panicked, but we all feel the frustration and there’s a certain need for patience to help get through a relatively short period of time,” the official said.
Officials who spoke with Reuters said that inflation has impacted families’ ability to obtain everything they need, especially goods with high consumer demand.
“We recognize that it has pinched families who are trying to get back to some semblance of normalcy as we move into the later stages of the pandemic,” the unnamed official said.
The administration, which has been asleep at the switch for the past couple of weeks and basically ignoring the situation said they are hopeful that “port operators, transportation companies and labor unions” will work longer hours to unload ships and transport cargo across the country to fill empty store shelves, Politico said.
However, it may be too late to do so according to Steve Pasierb, president and chief executive of the Toy Association in a statement to Politico.
“There’s no political intervention that’s going to get this done, and there may not be a human intervention that gets this done because this issue is now going to last well into next year,” he said.
The admonishment from the White House came as container ships holding tens of thousands of shipping containers remain backlogged at ports on both coasts. According to reports, there are 65 cargo ships waiting outside the Los Angeles port, which is currently full. In addition, 8,000 shipping containers are stuck at the Port of Savannah.
Meanwhile, Coresight Research Founder and CEO Deborah Weinswig made an ominous prediction, saying she believes the supply chain issues will linger past next year and into 2023.
“Let’s look at the math: It’s 14 days to get a container from APAC [Asia-Pacific] to the U.S. and 40 days for it to get back,” she told Yahoo Finance. “And we have a complete container misalignment right now. So that’s 80 days, we’re talking, in our opinion—we’re probably looking at Q1 2023 before all of those containers get back and realign.”
“This is not just a holiday challenge—which it is acute, probably the worst I’ve ever seen,” she continued. “I think that this continues. And that is where we’re going to see innovation and new jobs created, but we’re still really short right now.”
All of these issues have exposed the ineptitude and inexperience of Transportation Secretary Pete Buttigieg, the failed mayor of South Bend, Indiana, a city of 103,000 people who saw himself as worthy of being president. Failing at that, he found himself nominated by Biden to the transportation post.
And why wouldn’t he be? After all, as Joe Concha of The Hill points out, South Bend has a fleet of some 60 buses, a small train station and a small regional airport. So clearly, Buttigieg had the “experience” to manage the Department of Transportation, which has over 58,000 employees and a budget of & 87 billion.
Buttigieg has basically done nothing over the first nine months. Oh, he came out when the infrastructure bill was first proposed and talked about “systemically racist” highways…or something. He was all over the news as he and his “husband” adopted a couple of kids, which had the media in orgasmic delight.
But now? Old “Mayor Pete” has himself a genuine crisis to deal with, and clearly, as Concha points out, he is in way over his head.
Expanding on the above, the Washington Post in a tweet broke down the supply chain nightmare facing the country.
“Ships wait off the California coast, unable to unload their cargo. Truckers are overworked and overwhelmed, often confronting logjams. Rail yards have also been clogged, with trains at one point backed up 25 miles outside a key Chicago facility,” they said last Sunday.
Ships wait off the California coast, unable to unload their cargo.
Truckers are overworked and overwhelmed, often confronting logjams.
Rail yards have also been clogged, with trains at one point backed up 25 miles outside a key Chicago facility. https://t.co/9gTuUmZT1g pic.twitter.com/Xit0oPUPFs
— The Washington Post (@washingtonpost) October 10, 2021
Part of the issue, Concha notes is a labor shortage which has not only affected the transportation industry but has impacted industries and businesses across the board. There is a shortage of workers to offload ships, and truck drivers to get the goods to where they need to go. This is nothing new during Biden’s ill-fated, incompetent term since this has been ongoing for ten months. Nobody in the administration is able to explain it, least of all Labor Secretary Marty Walsh, former Boston mayor.
Biden's labor secretary Marty Walsh was stumped on #AxiosOnHBO as to why eligible workers aren't filling up available jobs: "I don't think there is an answer." https://t.co/Rt2cNUSH9C
— Axios (@axios) October 10, 2021
So what of Buttigieg? Surely the media must be curious what old “Mayor Pete” is doing to deal with the crisis, right?
Concha said he did a quick Google search of Buttigieg and used the “News” option. People Magazine, USA Today, and NBC News all were concerned only about his adoption of twins. Business Insider was waxing poetic about another possible presidential run, while only Fox News questioned what the hell he was doing about the supply chain issues.
The issue was finally addressed last week by Buttigieg, where all he said is the “challenges” would continue possibly for years and then turned to pitch the stalled $3.5 trillion socialist reformation of America plan touted as an “infrastructure” package.
“These challenges are definitely going to continue in the months and years ahead,” Buttigieg said. “This is one more reason why we do need to deliver this infrastructure package, so that we can have a more resilient, flexible physical infrastructure to support our supply chain in this country.”
Fine and dandy, Concha notes. “What is Buttigieg doing *right now* to address the crisis?” he asked.
Well, apparently there is a “task force” set up by the White House. He then tried to place blame at least in part on “private sector systems,” and then said the federal government has been doing such apparently useless things such as holding “roundtables” and talking to people.
Kind of like Kamala Harris’s “attacking” the issues at the border, Concha mused. Lots of fluff, not much substance. Actually in the case of Harris, there really hasn’t been fluff…just a bunch of vapid talk about “root causes.”
The best way to address Buttigieg’s amateur inexperience, Concha said, is brought to us by old Sleepy Joe himself…an attack ad from the 2020 presidential campaign mocking Buttigieg’s inexperience.
Joe Biden mocks Pete Buttigieg's experience in a new attack ad https://t.co/CiUPW3KMhL pic.twitter.com/t8AosxShjZ
— CNN Politics (@CNNPolitics) February 10, 2020
Then, after mocking Buttigieg Biden then went on to nominate him not for official White House dog catcher, or maybe West Wing interior decorator…no he nominated him to be Transportation Secretary, clearly payback for Mayor Pete immediately giving Biden his endorsement after dropping out of his laughable campaign for president.
To quote Concha:
“Qualifications? Who needs them?”
Especially in the midst of one of the biggest transportation and supply chain crises in our history.
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