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The Shortages Are Going To Get Worse Later This Year As Global Supply Chains Increasingly Falter

August 25, 2021

The Shortages Are Going To Get Worse Later This Year As Global Supply Chains Increasingly Falter

Have you noticed that it is a lot harder to get certain things these days?  Just recently, someone in my local area was surprised when her appointment to get the windshield on her vehicle fixed was canceled because it wasn’t possible to get a replacement windshield.  This was a windshield for a very common vehicle, and normally that wouldn’t be a problem at all.  But these are not normal times.  Thanks to several factors that I will detail in this article, global supply chains are now under more strain than we have ever seen in the post-World War II era, and unfortunately it appears that things are going to get even worse as we approach the holiday season.

I know that most of you probably don’t want to hear that the shortages that we are experiencing now are going to get worse.

So you may be tempted to stop reading this article now because you don’t want to see the bad news.

But it is imperative that you understand what is ahead, and so I urge you to keep reading.

Let’s take this one step at a time.  Right now, local news outlets all over the country are doing stories about the shortages in their local areas.  Here is one example…

Have you recently gone to the grocery store and found some of the shelves empty? If so, you aren’t alone.

Many people can’t find some of their favorite and essential items since the pandemic started.

As that article points out, the stores are trying to order the products that they need.

They just can’t get them.

…click on the above link to read the rest of the article…

“The Largest Ever Physical Transfer Of Gold”

May 30, 2020

“The Largest Ever Physical Transfer Of Gold”

Two months ago, when the market was in a state of near-total chaos as a result of a sudden collapse in global supply chains due to the hasty coronavirus lockdowns, one market that saw unprecedented turmoil was that of physical gold.

As we pointed out in late March, due to a sudden breakdown in physical gold supply as the world’s top gold refiners, those located in the southern Swiss town of Ticino, namely Valcambi, Pamp and Argor-Heraeus, suddenly stopped producing gold, the  result was a record divergence in the price of spot gold vs gold futures contracts…

… with gold futures decoupling and trading far above spot prices.

The resulting record divergence in gold futures vs spot (in some way analogous to what happened to the price of the prompt WTI contract in April, when the May WTI contract traded as low as ($40) as traders were willing to pay buyers to store oil in a world where there was suddenly no space for the physical commodity), unleashed a flood of physical gold into the US as a record scramble by traders rushing to take advantage of this arbitrage opportunity by shipping bullion to New York sparked what Bloomberg said “may be one of the largest ever physical transfers of the metal.“

“The flows into New York are unprecedented,” Allan Finn, the global commodities director at logistics and security provider Malca-Amit told Bloomberg as his company’s teams in New York have been working 24 hours a day to cope with unprecedented demand for physical gold while navigating lockdowns, flight disruptions and social distancing.

…click on the above link to read the rest of the article…

Dominos Are Falling – China Shutdown To Crush India’s Already-Crumbling Economy

February 18, 2020

Dominos Are Falling – China Shutdown To Crush India’s Already-Crumbling Economy

The supply chain shock emanating from China to other Asia Pacific countries and Europe, could become a major headache for India.

Bloomberg focuses on how an industrial shutdown of China’s economy has already had a profound effect on India’s economy and could get worse.

Pankaj R. Patel, chairman of Zydus Cadila, said prices of medicine in India have exponentially jumped in the last several weeks, thanks to much of the medicine is sourced from China.

The Indian pharmaceutical industry is experiencing massive disruptions that could face shortages starting in April if supplies aren’t replenished in the next couple weeks, Patel warned.

He said prices of paracetamol, a common analgesic, have risen 40% in India, while some antibiotic medicines have soared 70% since Covid-19 broke out in China last month.

Manufacturers in China have idled plants, and at least two-thirds of the economy is halted. Some factories came online last week with promises of full production by the end of the month, but for most factories, their resumption will likely be delayed. This will undoubtedly lead to medicine shortages in India in the coming months ahead.

A new theme is developing from all this mayhem – that is the reorganization of complex supply chains out of China to a more localized approach to avoid severing. But in the meantime, these complex supply chains in India and across the world will experience massive disruption caused by the shutdown. All of this points to ugly end of globalization:

Pankaj Mahindroo, chairman of the India Cellular and Electronics Association (ICEA), said the wrecking of supply chains in China could soon have a devastating impact on India’s smartphone production. 

Mahindroo represents companies including Foxconn, Apple Inc., Micromax Informatics Ltd., and Salcomp India, warned the “impact is already visible… If things don’t improve soon, production will have to be stopped.” 

…click on the above link to read the rest of the article…

Why Covid-19 Demands Our Full Attention

February 15, 2020

Why Covid-19 Demands Our Full Attention

This is an unprecedented moment for our hyper-connected planet

There’s a reason we’ve re-directed so much of our attention towards reporting on and trying to understand the novel coronavirus (covid-19) that originated in Wuhan, China in December.

The heart of our approach is to be “systems thinkers.”

“Learn how to see.  Realize that everything connects to everything else”

~ Leonardo Davinci

We don’t see the economy as a closed ecosystem to be analyzed and understood all on its own.  It’s connected to energy flows, especially oil.  So we investigate those, too, with an eye towards working out how fossil fuels’ eventual dwindling will impact an economic system that is utterly dependent on perpetual growth.

Without a healthy planet, without intact and functioning ecological systems, nothing matters in either the economy or the energy markets.  Both impact the ecological world And vice versa.  So we analyze and report on the environment, too.

Which is why we’re confident in claiming that humanity is now facing its greatest threat.  Our current path of depleting our essential resources at an accelerating rate in the pursuit of “more growth” is both unsustainable and self-destructive.

So here we are, with a global economy that’s very cost-efficient but not resilient.  It’s wonderful that Walmart has worked out how to order a new tube of toothpaste from China the second one is pulled off a shelf in Topeka, KS. But that means there is no deep storage to draw upon in times of disruption to the status quo.  No warehouses stocked with 12 months of future goods.  Just a brilliantly-complicated supply chain thousands of miles long that has to work perfectly for things to keep running.

…click on the above link to read the rest of the article…

Fiat Chrysler To Shut Serbia Plant As Covid-19-Shock Paralyzes Global Supply Chains

February 15, 2020

Fiat Chrysler To Shut Serbia Plant As Covid-19-Shock Paralyzes Global Supply Chains

It’s certainly plausible that the global economy is in the early stages of grinding to a halt. Already, we’ve noted that two-thirds of China’s economy is offline, with major industrial hubs idle and 400 million people quarantined.

The next phase of the supply chain chaos is to spread to regions that are overly reliant on Chinese parts for assembly, such as a Fiat Chrysler Automobiles NV plant in Serbia.

Bloomberg reports Friday morning that the plant is expected to halt operations of its assembly line because of the lack of parts from China as the Covid-19 outbreak worsens.

Turin, Italy-based automaker’s Kragujevac factory in Serbia, which assembles the Fiat 500L, has to bring its production line to a halt due to lack of audio-system and other electric parts sourced from China.

We reported on Feb 6 that Fiat Chrysler was expected to close the plant if the virus continued to spread.

Four of the automaker’s suppliers have been impacted by China’s decision to shut down much of its industrial sector as part of a quarantine that’s expected to take a massive chunk out of GDP growth in the first half.

Fiat Chrysler CEO Mike Manley said four of the company’s suppliers in China had already been affected by the outbreak, including one “critical” maker of parts putting European production at risk.

The evolution of the supply chain disruption emanating from China is spreading outwards and to the West. 

Wall Street is blind as a bat, or maybe their hope the Federal Reserve will keep pumping liquidity into the market will numb the pain of one of the most significant shocks expected to hit the global economy in the near term. This is mostly due to the world’s most complex supply chains, which as of late January, have been severed and will start affecting assembly plants in Europe. 

…click on the above link to read the rest of the article…

Global Supply Chains Imploding As Quarter Of German Firms Plan To Leave China

November 14, 2019

Global Supply Chains Imploding As Quarter Of German Firms Plan To Leave China 

The Bussiness Confidence Survey 2019/20 published by the German Chamber of Commerce in China, in cooperation with KPMG in Germany, finds that almost a quarter of German companies operating in China are preparing to relocate production facilities. 

The survey was conducted from late July through mid-September and had 526 member companies out of 2300 respond. Out of the 526 member companies, 23% of the respondents said their factories will be transferred out of China or are contemplating the move.

Among the German companies leaving or actively planning to leave China, about 71% blame increasing labor costs; 33% cited unfavorable policy environment; 25% said the US-China trade war, and 22% said market access barriers. 

Of the respondents who’ve resorted to relocation, 52% have chosen Southeast Asia, 25% India, 19% Central/Eastern Europe, and 17% Western Europe. Only 5% of respondents said they were going to move operations to the US, contrary to President Trump’s claim that companies exiting China will be rushing to the US. 

Respondents said the US-China trade war had created a toxic and “gloomy” business outlook that has contributed to the global synchronized slowdown. 

About 83% of German companies said the trade war has directly or indirectly affected their operations. “Business expectations have dropped to their lowest level in years with only 27% of surveyed German companies expecting to reach or exceed their business targets in 2019,” the survey warned.

Jens Hildebrandt, Executive Director of the German Chamber of Commerce in China, said: “2020 is likely to be characterized by uncertainty, stemming from an unresolved US-China trade dispute related with a decelerating Chinese and global economy.”

German firms also said market access barriers and regulatory hurdles stunted their growth in China, with 66% of firms saying they’ve encountered either direct or indirect market access restrictions.

 …click on the above link to read the rest of the article…

Trading away our future?

January 22, 2018

Trading away our future?

Early trade was about ecological adaptation, transporting essential food or other essential goods to a places where they were lacking. Very little in present international trade is based on that. Instead, trade in itself creates shortages. Today, Sweden only produces half the beef it consumes. This is not because there is no land or resources available in Sweden. On the contrary, the country has let a million hectares of meadows revert to forest and a lot of arable land is idle – or grazed by horses that people keep for a hobby. International trade can be a safety valve for food shocks by moving food from one part of the world to the other. Yet it has dramatically reduced each region’s self-sufficiency and made all of us dependent on global supply chains for our daily food. Some of the trade is really difficult to understand or justify. More or less identical products are exported and imported by the same countries. As the ecological economist Herman Daly points out: “Americans import Danish sugar cookies and Danes imports American sugar cookies. Exchanging recipes would surely be more efficient”.[1]

It is a mistake to conclude that there is a linear process driving farmers into increased levels of commercialization. In times of collapsing markets, natural disasters, unrest or war, self-sufficiency and non-market exchange is bound to play a bigger role. The Roman peri-urban sprawl with agricultural estates, villas, engaged in intensive commercial production went the same way as the Empire. At the fall of Rome the area fell into neglect and finally reverted to extensive pastoralism.[2] The pastoral beauty of this Roman Campagna inspired the painters who flocked into Rome in the 18th and 19th centuries, when it was the most painted landscape in Europe.[3]

…click on the above link to read the rest of the article…

The Seeds of Agroecology and Common Ownership

October 10, 2017

The Seeds of Agroecology and Common Ownership

The increasingly globalised industrial food system that transnational agribusiness promotes is not feeding the world and is responsible for some of the planet’s most pressing political, social and environmental crises. Localised, traditional methods of food production have given way to globalised supply chains dominated by transnational companies policies and actions which have resulted in the destruction of habitat and livelihoods and the imposition of corporate-controlled, chemical-intensive (monocrop) agriculture that weds farmers and regions to a wholly exploitative system of neoliberal globalisation.

Whether it involves the undermining or destruction of what were once largely self-sufficient agrarian economies in Africa or the devastating impacts of soy cultivation in Argentina or palm oil production in Indonesia, transnational agribusiness and global capitalism cannot be greenwashed.

In their rush to readily promote neoliberal dogma and corporate PR, many take as given that profit-driven transnational corporations have a legitimate claim to be custodians of natural assets. There is the premise that water, seeds, land, food, soil and agriculture should be handed over to powerful, corrupt transnational corporations to milk for profit, under the pretence these entities are somehow serving the needs of humanity.

These natural assets (‘the commons’) belong to everyone and any stewardship should be carried out in the common interest by local people assisted by public institutions and governments acting on their behalf, not by private transnational corporations driven by self-interest and the maximization of profit by any means possible.

The Guardian columnist George Monbiot notes the vast wealth the economic elite has accumulated at our expense through its seizure of the commons. A commons is managed not for the accumulation of capital or profit but for the steady production of prosperity or wellbeing of a particular group, who might live in or beside it or who created and sustain it.

…click on the above link to read the rest of the article…

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