{"id":52568,"date":"2020-04-16T07:11:41","date_gmt":"2020-04-16T12:11:41","guid":{"rendered":"https:\/\/olduvai.ca\/?p=52568"},"modified":"2020-04-16T07:11:47","modified_gmt":"2020-04-16T12:11:47","slug":"overcapacity-oversupply-everywhere-massive-deflation-ahead","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=52568","title":{"rendered":"Overcapacity \/ Oversupply Everywhere: Massive Deflation Ahead"},"content":{"rendered":"\n

Overcapacity \/ Oversupply Everywhere: Massive Deflation Ahead<\/a><\/h3>\n\n\n\n

The price of a great many assets will crash, out of proportion to the decline in demand. <\/em><\/p>\n\n\n\n

Oil is the poster child of the forces driving massive deflation: overcapacity \/ oversupply and a collapse in demand.<\/strong> Overcapacity \/ oversupply and a collapse in demand are not limited to the crude oil market; rather, they are the dominant realities in the global economy.<\/p>\n\n\n\n

Yes, there are shortages in a few high-demand areas such as PPE (personal protective equipment), but across the entire spectrum of global supply and demand, there is nothing but a vast sea of overcapacity \/ oversupply and a systemic decline in demand as far as the eye can see.<\/p>\n\n\n\n

Here’s a partial list of commodities that are in Overcapacity \/ oversupply:<\/strong><\/p>\n\n\n\n

1. Overvalued assets<\/p>\n\n\n\n

2. Overpriced income streams (as income craters, so will the asset generating the income)<\/p>\n\n\n\n

3. Labor: low-skill everywhere, high-skill in sectors experiencing systemic collapse in demand<\/p>\n\n\n\n

4. AirBnB and other vacation rental properties<\/p>\n\n\n\n

5. Overpriced flats, condos and houses<\/p>\n\n\n\n

6. Overpriced rental apartments<\/p>\n\n\n\n

7. Overpriced commercial office space<\/p>\n\n\n\n

8. Overpriced retail space<\/p>\n\n\n\n

9. Overpriced used vehicles<\/p>\n\n\n\n

10. Overpriced collectibles<\/p>\n\n\n\n

I think you get the idea.<\/strong><\/p>\n\n\n\n

Should China restart its export factories, then almost everything being manufactured will immediately be in oversupply, as the global export sector was plagued with mass overcapacity long before the Covid-19 pandemic crushed demand.<\/p>\n\n\n\n

Incomes will crater as revenues and profits crash<\/strong>, small businesses close their doors, never to re-open, local governments tighten spending, and whatever competition still exists will relentlessly push the price of labor, goods and services lower.<\/p>\n\n\n\n

Globalization has generated hyper-specialization in local and regional economies, stripping them of resilience.<\/strong> Fully exposed to the demand flows of a globalized class of consumers with surplus discretionary income, regions specialized in tourism, manufacturing, commodity mining, etc.<\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Overcapacity \/ Oversupply Everywhere: Massive Deflation Ahead The price of a great many assets will crash, out of proportion to the decline in demand.  Oil is the poster child of the forces driving massive deflation: overcapacity \/ oversupply and a collapse in demand. Overcapacity \/ oversupply and a collapse in demand are not limited to the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1726,24078,151,202,588,3500,4252,2856],"class_list":["post-52568","post","type-post","status-publish","format-standard","hentry","category-economics","tag-asset-prices","tag-charles-hugh-smith-2","tag-commodities","tag-deflation","tag-oil","tag-overcapacity","tag-oversupply","tag-supply"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=52568"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52568\/revisions"}],"predecessor-version":[{"id":52570,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52568\/revisions\/52570"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=52568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=52568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=52568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}