INFLATION WILL SUBSIDE IN ....2035

TWITTER THREAD HERE


Thanks to Tom again for these supply chains links.

The content is the best explanation why supply chains keep breaking down and there is absolutely no chance of subsiding inflation (meaning fixing supply chains) until 2035 the earliest.

1/ thread


Incora’s bankruptcy sends a warning signal to aerospace supply chains. Supply chain and caught between supplier and customers supply chains. And the financial squeeze. https://supplychaindive.com/news/incoras-bankruptcy-aerospace-supply-chains/652433/

Incora has 7000 suppliers and 8400 customers.

From 2020-2023 two problems occurred:

1) Delivery time doubled from 9 to 18 months from 50% of goods.

2) Higher price inputs from rise of prices of raw materials, which they couldn't pass on to customers as they have long term contracts.

2/


Okay, now SCALE IT UP folks, SCALE IT UP.

There are 334 million businesses globally.

To repeat: There are 334 million businesses globally.

3/


Almost all of them are having the exact same problem as Incora, some less severe, some more severe.

But, make no mistake about it, all of them are having the same problems for exact same reason that Incora can barely survive:

UPSTREAM AND DOWNSTREAM businesses are suffering from the same exact problems.

4/


Every single supplier of Incora has the same 2 problems as Incora.

Every single customer of Incora has the same 2 problems as Incora.

GET THE POINT, FOLKS?!

To repeat:

Every single supplier of Incora has the same 2 problems as Incora.

Every single customer of Incora has the same 2 problems as Incora.

5/


Global supply chains are now in the territory of Known Unknowns and Unknown Unknowns.

In 2013-2015 we were in the territory of Known Knowns. If DC and Beijing concurred on cooperation like in 2008, they'd fix the problems.

NOT NOW! We are in the realm of 2nd, 3rd, Nth order of UNKNOWN  EFFECTS.

6/


That is why we see the Fed, or Treasury of Congress of the White House doing something,  which temporarily alleviates supply chain problems, and then somewhere else among those 300 million global supply chain participants, something breaks again, hence entrenched inflation.

7/


The wave of breakdowns keeps going  the in Unknown Unknowns dimension.

Solution?

First, as noted by Incora and all others, COSTS OF RAW MATERIALS AND ENERGY.

Those are to be fixed first.

8/


Once costs of raw materials and energy stand under control, then the self repair of supply chains initiates.

But, GOVERNMENTS MUST PUT IN CONTROL SUPPLY OF RAW MATERIALS AND ENERGY, NOT PRIVATE BUSINESSES.

GoverNments have military, private businesses do not.

9/


Once Militaries of the Governments secure supply of raw materials and energy, then downstream supply chains can start the SELF REPAIR PROCESS.

So, we have 2 domains of operation:

1) Securing of supply of raw materials and energy: GOVERNMENTS-MILITARY

2) Reparing of supply chains downstream raw materials and energy: PRIVATE BUSINESSES

10/


Step one is under way.

But, until step one is complete, Step 2 will always be erratic.

Supply chains downstream raw materials always try to self repair, hence we see periods of lower inflation, but then the Unknown Unknowns show their head again, and inflation periodically surges again.

11/


My rule of thumb calculations:

Step 1: Complete in 2025 by US Military.

Step 2: Complete in 2035 by capitalist Supply Chains.

Full recovery to pre 2008 abundance: 2045.

12/


So, for now, current assessment of #krisonomics 

Everything  is bad.

Everything will get worse.

No light at the end of the tunnel.

13/end

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