“This is a new age of chaos, famine and disorder. The inflationary tsunami will have consequences even more pernicious than the cost-of-living squeeze…
“Almost inevitably, economic turning points tend to be more obvious with the benefit of hindsight than they are at the time, but even the blindest of observers couldn’t fail to notice that we are in the midst of just such an earthquake right now…
“In the end, there is no getting away from it; the imported nature of today’s inflation, given wings by the easy money policies of the last 20 years, is going to make us all poorer.”
https://www.telegraph.co.uk/opinion/2022/04/01/new-age-chaos-famine-disorder/
“Russia war ends era of globalization that kept inflation low.
“For decades, the free flow of trade across much of the world allowed the richest nations to enjoy easy access to low-priced goods and supplies. It meant solid economies and stable markets. And for households and businesses, especially in the United States and Europe, it meant an entire generation of ultra-low inflation…
https://abcnews.go.com/US/wireStory/russia-war-ends-era-globalization-inflation-low-83761180
“How Supply Chains Broke, Sparking Global Shortages.
“For two years, the pandemic threw the vital but usually invisible world of logistics into a tailspin… Now, Russia’s war in Ukraine and China’s continued hard line against Covid outbreaks pose the latest difficulties; both increase the uncertainty and costs of operating still-hobbled supply chains smoothly.”
“Strains in $23tn US government debt market intensify as Fed tightens monetary policy.
“Investors’ ability to trade US government debt has deteriorated to its lowest point since the ructions of March 2020, deepening worries about the world’s most important bond market as the Federal Reserve tightens monetary policy.”
https://www.ft.com/content/3494abc9-0b87-4206-8ad3-9e09b5e11730
“Rising Costs at U.S. Food Banks Mean People Who Need It Most Are Getting Less.
“In Omaha, the Food Bank for the Heartland is having to slash its food-spending budget, resulting in about 2 million fewer pounds of food for the people in the 93 counties it serves.”
“[US] Trucker on diesel prices: ‘We’re going to have a lot of bankruptcies’…
“Independent trucker Michael Whitaker says at the beginning of the year it cost $600 or $700 to fill up his truck tank. Now, he’s paying about $1,000. “You notice it into your pocket, oh yes,” says the Iowa-based trucker.”
“Historic oil release unlikely to solve energy crisis… US President Joe Biden announced on Thursday the US would release 1 million barrels of oil a day from its Strategic Petroleum Reserve over the next six months…
“Strategists are sceptical the largest strategic oil release in history will be able to arrest the global energy crisis, as Russian President Vladimir Putin ramps up pressure on European buyers to pay in more favourable terms.”
“Venezuela’s PDVSA seeks oil tankers in anticipation of U.S. sanctions easing.
“Venezuela’s state-run energy firm PDVSA is in talks to buy and lease several oil tankers amid a possible expansion in exports, according to three sources and a document seen by Reuters, a sign the country expects U.S. sanctions on its petroleum sector to be eased.”
“More energy price hikes in store as spectre of rationing looms [Ireland]…
“The announcement by Electric Ireland on Wednesday of another 23 per cent and 25 per cent increase in electricity and gas prices – adding on average €300 and €220 to annual electric and gas bills – was merely the latest instalment in a biting series of increases which are placing enormous strain on household budgets.”
“The UK’s only shale gas wells have been handed a year-long reprieve amid pressure on Boris Johnson to use fracking to lower energy prices.
“Cuadrilla had been under instruction to plug its two wells in Lancashire by the end of June 2022. But the North Sea Transition Authority (NSTA) said the firm now had until the end of June 2023 to evaluate options…”
“Campaigners have blocked the exits to seven oil facilities near London, Birmingham and Southampton, in a bid to halt new oil and gas developments.
“Protestors from the Just Stop Oil Coalition and Extinction rebellion have planted themselves along roads to stop oil tankers from leaving the facilities.”
https://www.cityam.com/protestors-block-exits-to-seven-oil-facilities-in-bid-for-no-new-oil-pledge/
“UK businesses face April ‘cliff edge’ as most pandemic support ends…
“Kate Nicholls, chief executive of trade body UKHospitality, described the VAT rise, tapering of business rates relief, employment costs and the end of both insolvency and rent arrears protections as a “quintuple cliff edge” for the sector.”
https://www.ft.com/content/ad8daea4-9097-41dc-9884-0c558dd41587
“Cucumber crisis: surging energy prices leave British glasshouses empty…
“While last year it cost about 25 pence to produce a cucumber in Britain, that has now doubled and is set to hit 70 pence when higher energy prices kick in, trade body British Growers say.”
“Spain allows supermarket rationing to prevent shortages.
“The move came as empty shelves appeared in many supermarkets due to the combined effect of a truck drivers’ strike and the Ukraine war… Spain has been struggling with a wave of social unrest over runaway inflation and rising prices.”
https://www.france24.com/en/europe/20220331-spain-allows-supermarket-rationing-to-prevent-shortages
“Russia threatens to cut off European gas supply [today].
“Moscow has set a Friday deadline for gas payments to be made in rubles. Germany has called this “blackmail” and insists on paying in euros or dollars… France’s economy minister said Berlin and Paris were preparing for a scenario where Russia turns off gas taps.”
https://www.dw.com/en/russia-threatens-to-cut-off-european-gas-supply/a-61324564
“Europe’s energy crisis sends shockwaves through Germany’s industrial heart…
“Germany’s Mittelstand, the small and mid-sized companies that power Europe’s largest economy, was already battling its biggest crisis in a decade trying to absorb rocketing energy bills. Then the government warned it might have to turn off the gas…”
“The economies of Russia and Ukraine will shrink by 10 percent and 20 percent respectively in 2022, according to the European Bank for Reconstruction and Development.
“In its first economic forecast since Russia’s invasion on February 24, the London-based lender warned on Thursday that the war had triggered “the greatest supply shock since at least the early 1970s…”
https://www.aljazeera.com/news/2022/3/31/russias-economy-projected-to-shrink-by-10-ukraines-by-20
“China’s economy hit by double whammy in March.
“Activity in Chinese manufacturing and services simultaneously contracted in March for the first time since the height of the country’s Covid-19 outbreak in 2020, adding to the urgency for more policy intervention to stabilize the economy.”
https://edition.cnn.com/2022/03/31/economy/china-economy-pmi-contraction-hnk-intl/index.html
“Six Chinese developers face indefinite trading suspension after expressing inability to meet March 31 reporting deadline.
“While Evergrande has already been suspended, China Aoyuan, Kaisa, Fantasia Holdings, Modern Land and Sunac will see their shares suspended from Friday.”
“China’s farmers face fertiliser crunch as COVID measures hamper deliveries. China’s COVID-19 curbs are disrupting the supply of fertiliser to the country’s northeastern bread basket just a month away from spring planting, threatening this year’s corn and soybean crops if not resolved soon.”
“Is it time to worry about an emerging markets crisis? [Yes]
“… the external environment facing low-income developing countries is deteriorating fast. US monetary tightening will certainly erode investors’ risk appetite… Meanwhile, global trade growth started to decline sharply in the latter part of 2021… This is all taking place against a background in which some important metrics of developing countries’ creditworthiness have deteriorated to worrying levels.”
https://www.ft.com/content/20377e61-a584-4206-8a12-a12b3b435c01
“Cold winter and fuel shortages ahead for Argentina…
““It’s going to be a tough winter in terms of fuel supplies because of Argentina’s diminished access to strong currencies like the dollar,” said Agustín Gerez, commander of state-owned energy company Ieasa, which organizes the country’s LNG tenders. “We hope winter will be mild and contain the demand”.”
https://en.mercopress.com/2022/03/30/cold-winter-and-fuel-shortages-ahead-for-argentina
“Signs of change in food consumption are clear in Latam…
“…economic pressures are already leading to changes in consumption… Within this context, manufacturers and brands in Latin America should consider adapting their product portfolios in order to improve affordability, and discourage downtrading.”
https://www.kantar.com/inspiration/fmcg/signs-of-change-in-food-consumption-are-clear-in-latam
“Venezuela report details 233 deaths due to hospital power cuts…
“”For the year 2019, 17 people died due to power outages. For 2020 it was 75 and in 2021 141,” said the National Hospitals Survey, which was endorsed by the National Academy of Medicine and opposition sectors.”
“Members of the Private Medical Practitioners of Nigeria have expressed concern that certain hospitals in Rivers State have closed owing to a rise in the price of diesel.
“Others are struggling to provide services… Nigerians have been suffering from a severe electricity shortage for months.”
https://www.informationng.com/2022/03/hospitals-shut-down-over-high-cost-of-diesel.html
“South Africa’s $6.5 Billion of Power Plans Delayed Again.
“South Africa’s plan to add an estimated 95 billion rand ($6.5 billion) worth of private power generation has been further delayed as the nation continues to suffer from intermittent power outages.”
“Tunisia’s political crisis worsens as president dissolves parliament.
“Tunisia’s populist president has dissolved the democratically elected parliament, intensifying the country’s political crisis eight months after he staged a power grab decried by his opponents as a coup.”
https://www.ft.com/content/72f58982-3e44-4ec8-b087-51a50dc0813c
“Lebanon’s wheat crisis worsened by funding delays.
“Ahmad Hoteit, the president of the Association of Mills in Lebanon, said: “The Ukrainian crisis has begun to have repercussions on Lebanon. Wheat shipments may arrive next week at higher prices, and given the high demand, the country that pays more gets the wheat.””
https://www.arabnews.com/node/2053866/middle-east
“Pakistan: Nationwide blackouts begin as power crisis intensifies.
“The power crisis across Pakistan has intensified as the overall electricity shortfall reached 5000 megawatts, local media reported on Thursday.
The unannounced load-shedding has begun across the country…”
https://www.khaleejtimes.com/asia/pakistan-nationwide-blackouts-begin-as-power-crisis-intensifies
“Pakistani Prime Minister Imran Khan has said he will not resign, striking a defiant tone ahead of a no-confidence vote expected to take place on Sunday.
“Pakistan’s embattled prime minister says he will not resign and accuses the US of conspiring with the opposition.”
https://www.aljazeera.com/news/2022/3/31/pakistan-pm-imran-khan-defiant-before-no-confidence-vote
“In Afghanistan, ‘people selling babies, young girls to survive’.
“When the family are able to eat, it’s often only bread, and sometimes with vegetables, accompanied by watered-down green tea. Sometimes there is sugar to put in the tea, which is a rare luxury these days, as they struggle to survive…”
https://www.aljazeera.com/news/2022/3/31/afghanistan-faces-hunger-crisis-of-unparalleled-proportions
“Sri Lanka: 50 injured as protesters try to storm president’s house amid economic crisis.
“Nearly 50 people were injured after authorities used teargas and water cannon to drive back a crowd that stormed the home of Sri Lankan president Gotabaya Rajapaksa, amid anger over the government’s handling of the nation’s deepening economic crisis.”
“World Bank urges support for poor as food prices soar…
“Net food importers will suffer the most from the economic repercussions of the war, according to the United Nations Conference on Trade and Development, which lists 36 countries as highly dependent on wheat imports from Ukraine and Russia — mostly in Africa and the Middle East.”
https://www.france24.com/en/live-news/20220331-world-bank-urges-support-for-poor-as-food-prices-soar
You can read the previous ‘Economic’ thread here. I’ll be back over the weekend with a ‘Climate’ thread.
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The great unwind is well underway now.
Jim, it is!
I was reflecting that if I actually intended to push the global economy into recession, I couldn’t have concocted a better recipe than we currently have: central banks forced to tighten; housing and stock market values artificially inflated after years of easy money; way too much debt; supply chain disruptions and supply shocks leading to higher prices for pretty much all key inputs, like fuel, grains, fertilizer, metals, semiconductor chips; labour availability issues; huge geopolitical uncertainty undermining confidence…
What a mess.