The supply chain is complicated. There is no switch you can throw to magically make all those connections smoothly work together again. Image courtesy of Adobe Stock.
The supply chain for everything is tangle up to the extent it will take lots of time to function normally again.
Two articles describing the depth of issues:
Analogy of turning off a complex computer system. Some of the hundreds of components won’t work when you throw the ‘on’ switch.
Description of the demand side pressure on supply chain. All those trillions of federal dollars sloshing around have created demand which has overloaded distribution systems.
American Thinker – 12/11/21 – We broke everything in the name of Covid – Author ran a large IT department at one point in the past. Every few years they had to shut down the entire computer system so that the factory could go through maintenance of the electrical system.
Seems like a good question. Why crosspost over from my other blogs conversations about the high inflation rate that we are seeing? What does that have to do with freedom? Actually, a lot. Inflation is a hidden tax on consumers. It takes money out of the pocket of people. It Read more…
The Consumer Price Index (CPI) increased 0.9% in October 2021 after a more modest 0.4% increase in September and 0.2% in August.
The October increase matches the June increase of 0.9% and is slightly higher than April increase of 0.8%.
Diving into the components of the CPI shows the increases are broader than several months ago.
The press release from the Bureau of Labor Statistics explains:
“The monthly all items seasonally adjusted increase was broad-based, with increases in the indexes for energy, shelter, food, used cars and trucks, and new vehicles among the larger contributors. The energy index rose 4.8 percent over the month, as the gasoline index increased 6.1 percent and the other major energy component indexes also rose. The food index increased 0.9 percent as the index for food at home rose 1.0 percent. “
Warning sign as we roll into winter is fuel oil increased 12.3% in October and utility gas increased 6.6%. Keep in mind those are changes for the month, not for the year.
The Producer Price Index (PPI) in October 2021 continues to show unusually high and ongoing inflation. Increasing October was 0.6%, which follows a 0.5% increase in September and 0.7% increase in August.
The PPI has shown high inflation for all of 2021. The worst months were 1.2% in January, 1.0% in April, and 1.0% in July. Those extremes have not repeated for the last quarter, which is a small amount of good news.
Graph at the top of this post shows the monthly change and final demand (the total index in other words) in blue. The average of the monthly changes in green. The red line shows core change, which excludes food, energy, and trade.
The PPI was increasing around 0.4% the month until the end of 2020. Since then it has averaged 0.8% for 2021 through October. Ouch.
The facade of the Federal Reserve Bank. Image courtesy of Adobe Stock.
Another senior official in the Federal Reserve had odd trades in 2020. This brings to three the number of extremely senior Fed officials doing strange things.
On 2/28/20 the chairman of the Federal Reserve issued a statement saying that the evolving coronavirus would require close monitoring by the Federal Reserve. Unusual release also indicated there were risks emerging in terms of economic activity.
Such statements get close attention by the investment markets because they contain any hint of what the Fed is thinking and what the Fed might do. The market then responds to those statements, inferring what it means and what those actions might do to interest rates and the stock markets.
“Battle Cry of Freedom” was a popular song during the Civil War. It was a celebration of the Union and freedom.
One place you can see the song used in movies is “Lincoln.” After the Republicans secured passage of the 13th amendment to permanently end slavery, the Republicans celebrated on the floor of the Senate by singing the song.
The amendment was passed over the harsh, vigorous opposition of the Democrats who remained in Senate. They did not want to set slaves free, even though they were not part of the South.
There is this idea floating around that Sweden, with its high per capita income and high standard of living, is the poster child for successful socialism.
Damage from the shutdown is getting more visible; it is growing, spreading every day.
Hospitals and surgeons have been devastated by stopping what is considered ‘non-essential’ care. Many hospitals may go under. Going under is what farmers are starting to do with their crops. After a panic like we are in, who has liability if anyone gets sick and thinks they caught the bug in a store, restaurant, or business?
