Supply chain and inflation

Seems to me nothing is being done to fix the supply chain that was disrupted by COVID. And that is a root cause of the world-wide inflation we are seeing. Its not just here in the USA, so we can’t blame it all on the Fed and fiscal policy. It seems that none of the Job Creators wanted to fix the problem early on in case things went back to normal soon. They haven’t, and it doesn’t seem like anyone is trying to fix what is likely a long term problem either. Perhaps they are making money just fine with things they way they are? Am I too cynical about this?

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That might be oversimplistic. As Wendy pointed out, inventories are rising faster than demand on many manufactured goods - leading to a glut. The biggest unknown is what the Chinese liability to COVID is. During a time when the Western countries are segwaying to coping with COVID is a way parallel to how they deal with the flu (another endemic, sometimes fatal disease, with partially effective vaccines), China is still following a Zero-Covid policy and using far less effective vaccines - which makes both their supply and demand graphs more probabilistic than certain.

That said, the disruptions caused by the derivative sanctions of the Russo-Ukraine War of petroleum products, combined with Saudi Arabia using supply constraint as a negotiating chip to remove the stigma the US put on its Crown Prince.

We are currently wrestling with the over generous policies of the Fed during the easy pre-COVID years (when real-estate and business friendly administration voices demanded that the Fed continue to cut interest rates to juice the equity market. This left them with little ammunition over the past couple of chaotic years and now they are forced to take corrective action to sop up the excess money supply dumped into the system to compensate workers who no longer had the ability to work.

As Wendy pointed out, these corrections don’t work their way through the system overnight and I’m expecting to hear the “R” word before this cycle is over.

Jeff

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It seems that none of the Job Creators wanted to fix the problem early on in case things went back to normal soon. They haven’t, and it doesn’t seem like anyone is trying to fix what is likely a long term problem either.

The purpose of ‘job creators’ is not to fix problems, it’s to make money. Something as amorphous as ‘the supply chain’ is not fixable, only the bits and pieces that affect you directly over which you can have some control. For example, rail transport of oil by John D. Rockefeller. Clearly a profit center so lets do something about it.

Am I too cynical about this?

Not cynical, unrealistic. Every business does its tiny bit and together, somehow, the world moves along. There is no central command because that is even more inefficient than self-interested individual action.

Schools of fish and flocks of birds are beautiful examples in nature of coordination without command and control, every bird and every fish follow some simple rules, just three or four of them and that’s enough to get them organized. As I recall from Boids

https://www.youtube.com/watch?v=bqtqltqcQhw
https://www.youtube.com/watch?v=QbUPfMXXQIY

Boids

https://www.google.com/search?client=safari&rls=en&q…

The Captain

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The purpose of ‘job creators’ is not to fix problems, it’s to make money.

Tru dat!

Fixing problems is the government’s job, and they don’t seem to do a very good job of that.

It needs to be said again so I’ll say it again:

The purpose of ‘job creators’ is not to fix problems, it’s to make money.

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combined with Saudi Arabia using supply constraint as a negotiating chip to remove the stigma the US put on its Crown Prince.

That’s one of the lower priority items that the Saudis are concerned about. Their main concern is Iran and Iran gaining [more] hegemony in the region. People saying nasty stuff about the crown price is nothing in comparison.

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