The World Economy Is Suddenly Running Low on Everything

[brooklynite]

Source: Bloomberg

A year ago, as the pandemic ravaged country after country and economies shuddered, consumers were the ones panic-buying. Today, on the rebound, it’s companies furiously trying to stock up.

Mattress producers to car manufacturers to aluminum foil makers are buying more material than they need to survive the breakneck speed at which demand for goods is recovering and assuage that primal fear of running out. The frenzy is pushing supply chains to the brink of seizing up. Shortages, transportation bottlenecks and price spikes are nearing the highest levels in recent memory, raising concern that a supercharged global economy will stoke inflation.

Copper, iron ore and steel. Corn, coffee, wheat and soybeans. Lumber, semiconductors, plastic and cardboard for packaging. The world is seemingly low on all of it. “You name it, and we have a shortage on it,” Tom Linebarger, chairman and chief executive of engine and generator manufacturer Cummins Inc., said on a call this month. Clients are “trying to get everything they can because they see high demand,” Jennifer Rumsey, the Columbus, Indiana-based company’s president, said. “They think it’s going to extend into next year.”

The difference between the big crunch of 2021 and past supply disruptions is the sheer magnitude of it, and the fact that there is — as far as anyone can tell — no clear end in sight. Big or small, few businesses are spared. Europe’s largest fleet of trucks, Girteka Logistics, says there’s been a struggle to find enough capacity. Monster Beverage Corp. of Corona, California, is dealing with an aluminum can scarcity. Hong Kong’s MOMAX Technology Ltd. is delaying production of a new product because of a dearth of semiconductors.

Read more: https://www.bloomberg.com/news/articles/2021-05-17/inflation-rate-2021-and-shortages-companies-panic-buying-as-supplies-run-short?srnd=premium-asia&sref=nXmOg68r

[OldBaldy1701E]

1. Almost every business

is too big for their britches, because it is the American way to 'grow'! (This actually means to conquer, but that is another aspect of our oligarchy for another time.) However, the entire thing is a crap shoot, and we let them call the shots. Well, now the shoe is on the other foot. I have already placed a personal bet as to how long the 'resistance' will last, because this country is pretty well brainwashed when it comes to what is perceived as most important, and I don't see much changing. But, I always seem to locate a bit of hope that this country will finally stop the lunacy that is paper worship and start putting their faith and effort in their fellow humans. (This would pretty much remove the practice of 'getting something for nothing', so I am not gonna hold my breath.

[apnu]

18. Its a global problem.

Auto makers can't get enough chips for their cars. So they're making them w/out the chips and stowing them until chips are available to install. This is because every car today, foreign or domestic, is heavily dependent on electronics.

I don't think its a matter of "too big for britches", as you say, but a fragile global pipeline of widgets for every company. Things like semiconductors have concentrated manufacturing in Asia. We've seen numerous disruptions to chip supply, be they political upheaval, or natural disasters affecting factories. Semiconductors isn't the only sector, but its one that's easy to hold up as an example.

[OldBaldy1701E]

21. Indeed.

This is because every car today, foreign or domestic, is heavily dependent on electronics.

Wonder how that happened? Wonder who came up with the idea to overload vehicles with a bunch of widgets that don't apply to the actual operation of the vehicle, yet can immobilize that vehicle if they don't work? Wonder who came up with the concept of 'throw-away' devices that cannot be repaired, or more importantly, what operational model was the basis for the aforementioned concept? What I meant by 'too big for their britches' is that they have overreached themselves in the name of 'progressive growth', which means either look like the current accepted definition of success or be treated like the opposite. That system was bound to fail... I see it as mildly lucky that it is being somewhat forced to happen, as opposed to being allowed to create maximum damage before it finally goes the way of the 'hunter/gatherer' concept. It now depends on whether or not we want to return to the level of greed that was rampant before. Do you? I sure don't.

[apnu]

22. Fair point on the auto industry.

Disposable tech is the problem. But not just autos, computers, phones, kitchen appliances — all have ‘planned obsolescence’. Who came up with that? IBM in the ‘70s and ‘80s. Its now a global phenomenon. We throw the tech away, including cars, when they break instead of fixing what’s broken.

[samnsara]

2. i am having a hard time finding some of my regular things..like pre mixed Diet Ice tea..

..and liquid eggs. Just odd things, but they have been off the shelf at my local grocers for a few months.

[ironflange]

15. No Diet Coke to be had here

That'll keep Trump away, though.

[kirkuchiyo]

3. For a while there was no taco sauce to be had at any store in my town...

Weird

[ironflange]

16. There was no Alfredo sauce here for a while

Go figure.

[bucolic_frolic]

4. QE overcapacity, boom, bust, resupply

Financial journalists post-Great Recession kept telling us that economists were saying "distortions" were being made in the economy. Without exception, they left it at that, I never saw an explanation of what they meant. About 2016-17, a few leaks emerged that low interest rates and the flooding of money into the economy was robbing from our future. Business creation and consumption was far in excess of what would ordinarily be expected, absent lowest interest rates ever.

Que pandemic. Panic, shutdowns, home confinement, low consumption, low production. Yes we used up inventories at the same time households and home gigs chewed up on-hand supplies, and liquidated excesses. So we emerge from Pandemic in a low inventory state. Yes it will continue into 2022, about a year, until everyone figures out that larders are full, and we're underconsuming again.

I expect full speed ahead until we hit a brick wall.

[hermetic]

5. Chicken

https://www.usatoday.com/story/money/food/2021/05/06/chicken-shortage-2021-chicken-sandwich-war-chicken-wings-covid/4936554001/

[IronLionZion]

6. Shortages are a great excuse to jack up prices

it feels like some of it might be intentional from those who have the means to profit from these things.

[Orrex]

7. And isn't it funny

how those prices seldom fall again as readily after the shortage has passed?

[LiberatedUSA]

8. Once they get a taste of the extra cash...

...there’s no going back.

[PETRUS]

9. You ain't seen nothing yet.

We're running low on some critical things that this article doesn't even mention.

-We're running low on time to address climate change.

-We're running low on biodiversity.

-We're running low on forested/undeveloped land.

-We're running low on the biosphere's capacity to process our output of nitrogen and phosphorus in a healthy way.

Those are four of nine "planetary boundaries" that scientists say we've already overshot.

We are speeding towards collapse.

[Jetheels]

12. I looked up the other five....

It didn’t mention over population.

[PETRUS]

20. Interesting comment. Some thoughts:

My guess is that the scientists studying such things would consider that outside the scope of their research. One could extrapolate a carrying capacity based on their research, but it would require making assumptions/judgements about lifestyle. Could the world support the current population if everyone lived like the average U.S. citizen? Not even close (which should be obvious, since we're having problems with ecological breakdown as it is). Could the world support the current population if everyone lived like the average Costa Rican? Pretty damn close!

I mention that country as a point of comparison, because in spite of a much lower per capita GDP (~$19k vs ~$65k for the U.S.), they have very good human development indicators (life expectancy of 80 years vs. 79 in the U.S., expected years of schooling 15.7 vs. 16.3 in the U.S.). They generate these outcomes with a much lower ecological impact (material footprint per capita of 8.2 tonnes vs. 49.11 tonnes for the U.S.).

Clearly it's possible to have too many people. If you ask me, I think humans probably are too numerous. But I don't think that's the real problem at this point. It's the activities of the richest people/countries that are the problem. For example, since 1990, the richest 10% are responsible for over half of all greenhouse gas emissions; the richest 1% emit more than twice what the bottom 50% emits (in total).

My last thought is that there are strong correlations between fertility rates and levels of education as well as the provision of medical services (especially family-planning). Given that we have examples from other countries that it's possible to provide excellent education and health care with a low material footprint, perhaps if we (globally) steered ourselves in that direction the birth rate would fall on its own.

[Jetheels]

24. I get what your saying, sort of. But it seems the lack of biodiversity is directly linked to human

population. David Attenborough thinks the planet cannot cope with too many more of us. Lyme disease is spreading everywhere because all the animals, for example wild turkeys, are not ubiquitous anymore, and ticks are part the of wild turkey’s diet.
As far as education and birth rate, yes they are directly linked.
Education is the best way to lower birth rate.

[PETRUS]

25. I'm in partial agreement

In "The Sixth Extinction," author Elizabeth Kolbert wrote that the rapid loss of biodiversity is because of "one weedy species" (humans).

What I would say is biodiversity loss is directly linked to human activities (not numbers). There's no doubt that too many people can be a problem in and of itself (and as I wrote before, I suspect there are too many of us). But it's not at all clear that the number of people on the planet is what's driving the problem today.

Food for thought: Since 1980, 48% of new income from global GDP growth has gone to the richest 5%; 28% of new income from global GDP growth during that time period has gone to the richest 1%. Remember (from my post above) that we know it's possible to produce a healthy, well-educated, long lived population using a fraction of the resources that we currently do. That tells me that an enormous amount of our economic activity - resources dug up and harvested, labor expended - is mostly done for the benefit of elite accumulation. Think of how much less pressure on the environment there would be if we put a stop to that.

[tekriter]

10. Our Suppliers

I work for a large international company that sells sofas, bookshelves and meatballs. You may have heard of them.

Well, we are terribly short on many items; some things haven't been available for months. In our case, we have a catalog with posted prices, so our pricing is locked in.

But our suppliers, in some cases, can't get materials at a price that would allow them to make a product and sell it to us and still maintain an income stream for them.

[PoliticAverse]

11. Turns out "just in time" manufacturing has a flaw. n/t

[Warpy]

13. Demand is picking up but the supply has been cut

because nobody wants to be stuck with unsold inventory, it looks bad to the bankers. Distributors should have been placing orders in December and January, but they don't think that way during inventory season, so they didn't.

Stuff is going to be in short supply but fortunately not everything, all at the same time. I read a few days ago that dumbasses were back to hoarding toilet paper. I supplse they all discovered the rodent colonies in the bottom of the pile they hoarded last year.

[Javaman]

14. that's because the lizard people are now building their giant base in the inside of the earth

to allow them to take over the world and turn it into a a pedophile/cannibal pizza delivery service to control the masses to do their bidding!!!!

or something like that according to the Qanon nuts.

[maxsolomon]

17. In general, I don't care.

The world uses too much stuff, makes too much stuff, throws away too much stuff.

Now, when I go to Kauai in the fall, there better be more rental cars!

[machoneman]

19. Whatta think was in those huge warehouses? They were the buffer to high/low demand....

in evening out the flow of goods to retail stores, car lots, etc. Those 1 million+ sq. ft. buildings were filled to the gills just before the pandemic struck.

Lower demand, manufacturer's laying off workers and the inevitable draw down of said racked goods meant the cupboard, so to speak, is bare. And yes, it will take time for the ramp up just to supply the rapidly increasing current demand let alone re-stock those near empty massive warehouses. I see 2022, maybe even June 2022, before things go back to 'normal'.

[BigmanPigman]

23. When this all started in 2020 I said I wanted some sort of study done

after all of this is over. I think the study should focus on what specific items were gone and when in the course of the pandemic was there a shortage. I know some was originally due to hoarding but when that stopped certain items were still hard to find.

Why was Jello chocolate pudding missing on shelves but vanilla and butterscotch were fully stocked? Then when choc was available the price increased 20%. Why?