And not in a good way…
The whole Red Sea issue is and will continue to impact the USA, even if it is half a world away.
Turmoil in the Red Sea is taking a turn for the worse, and may create new bottlenecks in an already strained global supply chain.
Why it matters: The situation has become another wild card for a world economy increasingly wracked by instability.
Catch up fast: The U.S. and U.K. conducted targeted strikes in Yemen against Iran-supported Houthi rebels on Thursday, in reprisals for their incursions in the Red Sea.
The impact: The tensions have sent oil prices on a tear, and complicated shipping for a number of companies — including Tesla, which suspended production in Germany to grapple with supply chain troubles.
Full article and links HERE from Axios.com
When everything has been ‘offshored’ for manufacturing, just getting product becomes an issue, even moreso when you look at the number of companies that now use just in time (JIT) warehousing of goods, like WalMart.
If you remember last year, the chip shortage from the far east just about crippled auto manufacturers like Ford who had thousands of vehicles parked waiting computer chips and the car lots were pretty much bare, to put it mildly.
These days, the US actually manufactures very little. Almost no steel of any type, many drugs are offshored, and most types of chips are also offshored.
Add to this the perturbations caused in the global supply chain by having to either go around the Horn, or Transpac and attempt the Panama Canal (which is having issues with low water and restricting the number of TEUs per ship due to depth issues and the time it takes to refill the locks limiting the number of ships per day, and you’ve got an additional 10-20 transit days to get product moved.
This doesn’t bode well, especially if we have as bad a winter as some are predicting, and with this administration bumbling around, could and probably will drive inflation even higher than it already is.
The sad part is that salaries, pensions, etc. are not even close to keeping up with inflation now, much less if it continues rising, even as product becomes less available.
All I can suggest is hunker down, make sure you get refills on your medications at every chance, keep as much cash handy as you can, and limit the amount of credit you use until we figure out where we’re going to end up for the next year or so…
And stock up on staples that will last, and look around to make sure you have people you can trust near enough to pool assets with if required.
I’m no expert, don’t play one on TV, and I didn’t stay at a Holiday Inn, so YMMV…
