Overview:
China is trying to start back up but finding there are a) missing links in its internal supply chains, and b) few customers placing orders, so it’s like pushing wet sand with a bulldozer that has only one track. This will force Chinese companies to close and trigger Chinese banks to fail, and that’s starting to happen right about… now.
Meanwhile, This virus will ping-pong around the southern hemisphere, mutating and gaining strength during the southern flu season, before migrating north in the northern fall. Just in time to wreak havoc once again on what’s left of the world’s economy by forcing new lockdowns in China and everywhere else.
My main problem with Trump is he can’t hire competent people to save his life. Reagan had significant dementia, but an excellent staff + cabinet and so went out in style. This administration should be able to see these upcoming events but it can’t or won’t, so we need to adapt. Current shortages will get worse and worse as China flails about in its death throes and big business continues to suck at the government tit instead of doing a massive transition to critical manufacturing in the US.
So here’s how it goes in detail:
If products don’t get used, or local businesses can’t place restocking orders, then the output end of the supply chain stops and like a slinky, the force gets reflected back down the chain to the manufacturers and their suppliers. No single product has all its components built single manufacturer anymore. Vertical integration got replaced by outsourcing and just-in-time. These days, a manufacturing plant sources parts, feedstock, expertise, transport, and supplies from a web of supporting companies. Now that they’re trying to bring people back to work they are finding that a critical person or supplier is still not available, so that line can’t restart, so the workers stand around for a day or so and get sent back home. That’s what it’s like to be near the tail end of the slinky.
Once they do start up, they’ll find their customer base is less than half of what it once was, because capitalism and personal responsibility all that insure a ton of businesses fail because they can’t get zero interest bridge funding. The jobless rate goes through the roof, so everyone stops spending on non-essentials and starts hoarding cash. At the other end of the slinky, the manufacturers have to slow production, cut workers, minimize orders to their suppliers. Suppliers can’t meet their loans, so they get shut down because capitalism happens even in China now. Critical parts are no longer being made and the manufacturer in the middle has to shut down again. Eventually it can’t restart.
I just ordered two additional solar panels for my stock of spares, and was told by my supplier that that particular (popular) model was out of stock in the US warehouse and awaiting another shipment from China. I asked how long. Still waiting on the response.
Look at the grocery stores. Traffic is now at or below normal and yet bare shelves are everywhere. Why is that? Because packaging material comes from China. No bags for chips; no chips on the shelves.
Right now, replacement parts for pretty much everything come from China. Including parts that keep our power grid up and running, and tires that keep our transport trucks rolling.
There are ways out of this. Expensive, gut-wrenching, population-shifting ways that smack of socialism and wartime; right down to re-tooling manufacturing plants, converting shopping malls to manufacturing, trashing environmental and safety regulations and building codes for the interim, planting coronagardens, and shifting populations to temporary camps full of National Service draftees to support the new manufacturing plants from walking distance. But not to worry; these actions will not be taken because the current administration is stuffed with anti-science idiots too busy praising the buck-passer-in-chief to notice the zombies are marching up their steps.
So the replacement parts won’t be happening. Expect more and more shortages. Expect more and more addicts roaming the streets looking to break into houses. When you hear that tires are in short supply, expect trucking to be in the process of shutting down, because they go through tires like crazy. When you see the first intermittent grid failure, expect that to become the new normal for you.
Act accordingly. The time for planning has passed.