The global economy is starting to unravel...

 

Volkswagen was one of many companies that had to reduce production due to supply issues. The Guardian/Reuters.

The global economy is starting to unravel due to a global supply crisis. The Guardian. Major shortages have occurred in energy, transportation and labor, which is having a major effect on the economy. The crisis is being driven by large consumer demand along with the lingering effects of the Coronavirus pandemic. Economists are concerned about signs out of China, where manufacturing seems to be slowing down. Shipping costs have exploded as well and there are long backups in unloading ships. 

My Comment:

It's about time the media acknowledged what is happening globally. The world economy seems very close to total collapse and nobody seems to be noticing it. At least nobody in the media outside of right wing and fringe sources. 

Much of this is due to increased demand for goods as a result of the pandemic. A lot of events were canceled and people are spending less time going to restaurants or concerts, even in places where everything is mostly back to normal. I know I have hardly gone out to eat since the pandemic began, though that was more due to the fact that every restaurant is short of staff. The money that would have been spent on going out and doing things is now being spent on buying things instead of experiences. 

That means that instead of flying to Hawaii, people are buying Nintendo Switches and PlayStation 5's. This has lead to a major shortage of chips which has caused major issues throughout the economy. New car production have slowed and that has made the used car market to go nuts. My SUV that I bought in 2019 is now worth more than it was when I bought it and my 11 year old sedan has more than doubled in value the last time I checked it on KBB.

But it's not just demand that it is causing problems, it's a massive shortage of workers as well. Major aid programs have gotten rid of incentives to work. Even after many of these programs have ended people have not returned to work. I guess people have decided that a lower wage job just isn't worth it. Without these workers basically every company desperate for workers. Even increased wages and benefits are not bringing these people back into the work force. This is causing major shortages in truckers and ships are not being unloaded due to a lack of workers. 

Inflation is starting to creep in as well. Prices have gone up across the board. With trillions of dollars being pumped into the economy it is no surprise that prices are going up. Worse, the economy is contracting so we are having stagflation. With prices out of control it has already eliminated much of the games we had under President Trump.

Nowhere has this been more clear with energy prices. Gasoline is a lot more expensive than it was before the pandemic and the Biden administration has not helped things with their actions attacking oil production and transportation. But it's not just oil and gasoline that is going up it's natural gas and coal. The UK has seen gas lines and may have some major problems with heating homes this winter while China is having rolling blackouts due to a coal shortage.

 I do fear that this is going to cause major unrest in the United States. Our country is so divided right now the only thing that is keeping us together is our bread and circuses economy. If that starts to go away someone is going to get the blame and it could cause the long awaited civil war. That's the worst case scenario but even if we avoid it I think we are going to have a long couple of years to get out of this tailspin. And you know that Joe Biden isn't going to be the one that will help things, if indeed things can be helped.