Classic Kites

Main Menu

  • Home
  • Kites
  • German Loans
  • German Economy
  • Flying Kites
  • Finance Debt

Classic Kites

Header Banner

Classic Kites

  • Home
  • Kites
  • German Loans
  • German Economy
  • Flying Kites
  • Finance Debt
German Economy
Home›German Economy›Diane Francis: Supply chain disruptions derail the global economy

Diane Francis: Supply chain disruptions derail the global economy

By Bethany Blackford
October 12, 2021
0
0


Breadcrumb Links

  1. Diane Francois

All the pillars of prosperity are now wobbly

Author of the article:

Diane Francois

Release date :

12 October 2021 • 58 minutes ago • 3 minutes to read • Join the conversation

Empty shelves in a grocery store in London, England. Photo by Chris J. Ratcliffe / Getty Images Files

Content of the article

The Chinese economy is slowing down. Energy costs are skyrocketing. Grocery shelves in some countries are empty. Automakers and other goods producers around the world have closed their doors due to a shortage of semiconductor chips. Shipping costs are skyrocketing, and auto dealerships and even Apple stores have record inventories. Fast food restaurants are short of potatoes and carpenters are short of wood. Supply chains are disrupted. Inflation is hiding.

Advertising

This ad has not yet loaded, but your article continues below.

Content of the article

This is a Great Unraveling of the previously unfettered world trade and economic system. It is a ripple effect of the pandemic and pent-up consumer demand, but it is also a permanent readjustment of the global system due to geopolitics, trade disputes and an intentional decoupling of China by the ‘West and Japan.

For a commodity-focused country like Canada, the news is mostly positive, as logging, mining and oil companies are getting higher prices for their commodities than they have been receiving in years. Oil hit US $ 80 a barrel for the first time in three years last week and natural gas is on the rise – the two main reasons the Canadian dollar has strengthened in recent weeks against the US dollar. But, on the other hand, prices are generally on the rise and Canada is a huge importer of food and manufactured goods. And Canada’s largest manufacturing sector, autos and auto parts, suffers from shortages of chips and shrinking orders.

Advertising

This ad has not yet loaded, but your article continues below.

Content of the article

But every country in the world is negatively affected by supply chain disruptions and these conditions are deviating from the global economy and preventing a full recovery of the economic fallout from COVID-19.

All the pillars of prosperity are now wobbly, from just-in-time manufacturing to offshore sourcing. The average supply chain journey from materials to store shelves involves at least 15 steps, and single step disruption creates world-class backups. This year, the cost of transporting a 40-foot sea container between North America and Asia has increased from US $ 5,000 to US $ 27,000.

To this quagmire is added the ongoing pandemic as parts of the “rich” world as well as the “poor” world continue to enter and exit the lockdown. There are also tens of billions of additional vaccines left to administer. Africa is virtually drug-free, as is the Middle East, when only 35% of people in Latin America and the Caribbean have been vaccinated.

Advertising

This ad has not yet loaded, but your article continues below.

Content of the article

Rising energy prices are slowing growth. For example, China shot itself in the foot by banning imports of Australian coal in retaliation after Canberra launched a probe into the Wuhan lab in China where COVID-19 started. About 70 percent of China’s electricity comes from coal, and excessive prices have forced huge regional electricity authorities to shut down access to tens of thousands of factories.

Geopolitically, China has crossed the line. Its aggression in the South and East China Seas and its hawkishness towards Taiwan, India and Japan backfired, forcing companies to shift production to Vietnam or repatriate it in order to eliminate dependence on Beijing. Already, a large part of Apple’s iPads are produced in Vietnam, along with its AirPods. Japanese manufacturers are moving production elsewhere or to Japan, thanks to a $ 2.2 billion fund set up to help its companies decouple from China.

Advertising

This ad has not yet loaded, but your article continues below.

Content of the article

  1. Intelligence and security professionals, inside and outside Canada, are frustrated by the Canadian government's intransigence and appeasement towards China.

    Diane Francis: Canada’s many failures in China

  2. A glacier is seen from NASA's Operation IceBridge research aircraft March 30, 2017 over Ellesmere Island, Canada.

    Diane Francis: Why Britain Wants to Help Strengthen Canada’s Arctic Defenses

  3. Nothing

    Diane Francis: Trudeau neglected defense – and our enemies will profit

  4. Nothing

    Diane Francis: the toll of failure of Justin Trudeau

The result is that global industrial production is now stagnant, according to the Wall Street Journal, which quotes the Kiel Institute for the World Economy, a German think tank. This year’s forecast for global economic growth has been lowered to 5.9 percent from 6.7 percent, due to problems in the supply chain.

The danger, according to finance guru Mohamed El-Erian, adviser to insurance giant Allianz, is that it could result in “stagflation,” a combination of low growth and high inflation.

If so, central banks may need to act quickly to raise interest rates. This will further hamper growth and in turn affect the stock markets and especially Canada. Our governments are the most indebted among the G7 countries and Canadians have the highest consumer debt in the world. Buckle up your seat belts.

Financial post

Read and subscribe to Diane’s America newsletter at dianefrancis.substack.com

Share this article in your social network

Advertising

This ad has not yet loaded, but your article continues below.

Featured newsletter logo

Featured Articles from the Financial Post

Sign up to receive the best daily stories from the Financial Post, a division of Postmedia Network Inc.

By clicking the subscribe button, you agree to receive the above newsletter from Postmedia Network Inc. You can unsubscribe at any time by clicking the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Thank you for your registration!

A welcome email is on its way. If you don’t see it, please check your spam folder.

The next issue of Financial Post Top Stories will be in your inbox soon.

We encountered a problem while registering. Try Again

comments

Postmedia is committed to maintaining a lively but civil discussion forum and encourages all readers to share their views on our articles. Comments may take up to an hour of moderation before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread that you follow, or if a user that you follow comments. Check out our community guidelines for more information and details on how to adjust your email settings.


Related posts:

  1. Coronavirus pandemic triggers delivery container disaster | Firm | German financial and monetary information | DW
  2. EUR / SEK: international restoration hopes to assist crown – CIBC
  3. Eurozone retail gross sales and COVID-19 information at a look
  4. A bit of Polish financial miracle? – EURACTIV.com
Tagssupply chain

Recent Posts

  • Matt Doherty Reveals Painful Way Players Relax After Storytelling Session – Thick Accent
  • Ukraine estimates significantly higher number of Russian casualties in Crimea explosions
  • Biker killed in freak accident after being slit by glass-covered kite string
  • Macro Headwinds Slow Global Leveraged Loan Market in H1 | White & Case srl
  • Gen Con 2022: Polygon’s best board games are also the most chaotic

Archives

  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • July 2020
  • November 2019
  • October 2019
  • September 2019
  • July 2019

Categories

  • Finance Debt
  • Flying Kites
  • German Economy
  • German Loans
  • Kites
  • Terms and Conditions
  • Privacy Policy