• 4 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 7 minutes Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 13 minutes NordStream2
  • 15 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 6 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 9 hours California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 19 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 8 hours Did China cherry-pick the factors that affected the economic slow-down?
  • 5 days "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 2 days U.S. : Employers Can Buy Retirement Security for $2.64 an Hour
  • 3 days Nord Stream - US/German consultations
  • 409 days Class Act: Bet You've Never Seen A President Do This.
  • 5 days An Indian Opinion on What is Going on in China
  • 2 days Forecasts for Natural Gas
  • 2 days Australia sues Neoen for lack of power from its Tesla battery
  • 5 days Storage of gas cylinders
  • 5 days Can Technology Keep Coal Plants Alive and Well?
ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Premium Content

The Global Supply Chain Crisis Could Last Until 2023

  • The supply chain crisis is one of the main culprits behind inflation, increasing costs for producers that are then passed on to the consumer
  • The uncomfortable truth about inflation that most central banks seem unwilling to face is that it will remain with us until these supply chain bottlenecks are solved
  • According to the Chairman and CEO of one of the largest port operators in the world, this supply crisis could last another two years

Global central bankers have been out and about continuing to promote a narrative that inflation is "transitory." We've seen it from the likes of Powell, Lagarde, Bailey, and Kuroda. Logically, these monetary wonks are right, inflation caused by supply chain bottlenecks will resolve itself, but these officials have yet to provide a timeline because they don't know.

For more insight on when global supply chain bottlenecks will subside, Dubai's DP World, one of the biggest international port operators, Chairman and CEO Sultan Ahmed Bin Sulayem spoke with Bloomberg TV at the Dubai Expo 2020 on Friday and said disruptions could last for another two years. 

"The global supply chain was in crisis at the beginning of the pandemic," Bin Sulayem said. "Maybe in 2023 we'll see an easing."

He pointed to skyrocketing container rates and said price increases are due to shortages and the accumulated delays. "Freight rates will continue to increase, and the shipping lines are having an amazing time," he added. 

For some context on DP World's operations, it manages the Port of Jebel Ali, also known as Mina Jebel Ali, a deep port located in Jebel Ali, Dubai, United Arab Emirates. The port is the world's ninth busiest port. 

The world's largest shipping line, A.P. Moller-Maersk, recently warned bottlenecks might last longer than expected, and some shippers have pledged to cap spot rates. DHL and UPS have also warned supply chain disorder will not only persist into next year but could leave a permanent scar. 

Before global supply chains splinter further and lead to more shortages worldwide, the question is: How can supply-chain bottlenecks be resolved? 

Since the crisis was created by surging demand putting strain on container capacity, suppliers, and logistics companies as they struggled to deliver goods, the easiest way to break this vicious cycle is for consumer demand growth to wane. That solution is something countries aren't willing to embark on because it will disrupt their economic recoveries from the virus pandemic lows. 

Mohamed El-Erian, former PIMCO CEO and chief economic adviser at Allianz, believe that these disruptions "will be with us for a while," prompting producer prices to continue soaring around the world that eventually push up consumer prices. 

El-Erian warns supply-side troubles could last for one to two years, if not more, which translates into stagflationary winds for the global economy unfamiliar to those who did not live through the 1970s.

While industry leaders continue to warn about continued supply chain woes, central bankers live in an alternative world of denial that will ultimately crush any credibility they have left. 

By Zerohedge.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News