Thread by @APhilosophae

Thread
Most in government and in society don't understand that the modern world operates on a "just in time" supply chain. People keep asking "What caused this?" "Brandon is an idiot, he's ruining the economy!" "Is it because workers are refusing the jab?" Lets take a look...

The shutdown in early 2020 was the first time in modern history that supply chains and national economies all decided to collectively pause for a 15 day period. This has never happened before. Not after 9/11, not after the fall of the Berlin Wall, or the collapse of the USSR.

There was no fundamental understanding of what this would do. Many felt that economies and supply chains would pickup where they left off, like a 2-week vacation had just happened. But this wasn't what happened. Things fumbled trying to start back up in a big way.

As governments tried to figure out what policy worked, what didnt, and what level of threat Covid really was they werent prepared for the effects shifting policies had on a global just in time supply chain that has now once been shuttered. voxeu.org/article/just-t…

When China implemented the first lockdown anywhere in the world, the supply shock immediately hit European and American companies. Baldwin and Freeman (2020) have referred to this as `supply chain contagion’. This 'supply chain contagion' is still circulating with us today.

Even the World Economic Forum had to admit that in June of 2020 "The overall impact of the outbreak and the resulting emergency measures on international trade resulting from COVID-19 remain to be seen." --They had no clue what this had done to the system. weforum.org/agenda/2020/06…

Just in Time Supply Chains: JIT supply chain management is a pervasive practice: even in industries like “wood and products of wood” or “non-metallic mineral products” about 30% of all companies report participation in JIT supply chains.

About two thirds of firms in “motor vehicles” production are JIT intensive, which is the highest penetration in the sample. About 2/3 of all French manufacturing workers are employed in JIT supply chains and 60% of French international trade volume can be traced to JIT firms.

And France isnt unique in this, they just have some of the most comprehensive data available on JIT Supply Chain metrics within their nation. All 1st world nations now rely on Just In Time Supply Chains with China, the EU, & the US being the backbone of the international economy.

Fast forward to June 2021. China shuttered one of its largest ports (3rd Largest Port) due to a Covid outbreak. This put another major stutter into an already stumbling system. Goods shipped in June from China are 4th Quarter Staples in the US and EU. us.leman.com/news/largest-p…

So as soon as a June stumble effects Dec., you see a 6 month ripple effect take place over night. Couple this with driver shortages, strikes, fuel issues and restrictions, too few vessels, mandates, and refineries shuttering if workers test positive...

you end up with a drive up in [real] prices on goods that are already shelved, and a lack of incoming product as replacement. Poor Fed policy of near zero rates help fuel money printing and government spending as an attempted offset. This drives actual inflation.

Now, you've got a years worth of backlogs in the system, shortages, rising costs, monetary inflation, a bulk of the population wanting to go back to their normal lives, while a powered but smaller portion want to stay behind Covid measures and mandates.

So any return to normalcy is at least 1 year away at the earliest. Until policies are entirely redrawn to pre-covid the Just In Time supply chain the global system operates on will be operating with like a person trying to run while their shoe laces are tied together.

There will be a lot of stumbling. Take the European Fertilizer manufacturers, a key element in global food production. As recently as September they've shuttered two of the EU's largest fertilizer manufacturers due to high fuel costs. bloomberg.com/news/articles/…

Fertilizer prices are already high, and that’s adding to increasing expenses for farmers, who are paying more for everything from land and seeds to equipment. The higher costs of production may mean even more food inflation is on the way. This could also indicate food shortages.

Higher costs for fuel means higher costs for heating homes at a time when consumers are also paying more food and many are still struggling from the pandemic’s economic fallout. This could look to become cyclical as industries gain footing, stumble, shortages occur, and repeat.

The only way for a Just In Time Global Supply chain to function as it had prior to COVID is in an unrestricted manner, meaning unrestricted by Covid/Post-Covid policies. Until that happens, we will be in an ever increasing cycle of traction, stumbling, shortages,& cost increases.

What governments choose to do is beyond me. I don't suspect we see anything positive on the near horizon. We may be living in a Not In Time Supply Chain for the foreseeable future.

Be Kind to Your Neighbors