You Better Wake Up, Because The Shortages Are Getting A Lot Worse

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For months, experts have been warning us that shortages are only getting worse. Industry after industry is deeply hurting and executives say that there’s no end in sight for the supply chain crisis. To make things worse, the vast majority of our manufacturers are extremely reliant on technology to keep their operations running, which has become pretty standard in our modern world. But due to a global chip shortage, thousands of industries are now struggling to increase production to meet demand. And we’re being told this is just the beginning. In January, many were expecting the global semiconductor shortages to be over by the end of 2021. Here we are at the end of the year, and so far, things have gone from bad to worse. Even the corporate media is alarmed by the fact that one of the core parts for global production is simply missing everywhere.
The Wall Street Journal recently published a piece entitled: “The Global Chip Shortage Is Far From Over As Wait Times Get Longer,” in which it revealed that companies are facing extended delays to get the chips they need to make their machines and products work. It’s an unprecedented situation for the auto industry and it has become particularly worrying for other industries as well given that now millions of products need chips to function. We’re rapidly getting to a point where waiting times can’t even be measured in weeks anymore. The truth is that the global semiconductor shortage shows no signs of easing, and in the meantime, the automotive industry continues to face a crunch like no other, with many of the biggest carmakers in the world blaming the shortage for disappointing financial results.
Considering that the scarcity of chips has collapsed new car production and car dealers around the country are seeing their inventories drop to alarmingly low levels, consumers have been turning to the used car market. Consequently, as demand has skyrocketed in recent months, used car prices just hit absolutely insane levels. With far fewer new cars hitting the market, over the past 12 months, prices for used cars have jumped by more than 24 percent in the US, and consumers are engaging in bidding wars that have been pushing those prices even higher.
There’s a similar phenomenon happening with farm equipment. Since the chip shortage has broken down production, farmers are turning to used equipment to fulfill their needs. Just like we’re witnessing with used cars, many pieces of used farm equipment are now selling for simply insane prices. According to farm equipment dealer Joel Everett, one used 2009 John Deere tractor was at a recent auction in Strawberry Point, Iowa, for tens of thousands of dollars more than its regular price when it was brand new. Of course, all of those increased costs for farm equipment will ultimately result in higher food prices.
Already, food prices are rocketing at a very brisk pace. Crop failures, harvest setbacks, rising consumer demand, and prolonged supply chain disruptions have all contributed to this painful increase, and the latest spike has affected almost all types of foodstuffs, adding to inflationary pressures across the entire economy. Day after day, more people come forward to expose the empty shelves that they see on a regular basis. And as food supplies get tighter, we are going to see even more shortages erupt in the months ahead, and price hikes will be particularly painful.
In the USDA website, they added a section specifically telling us that there are “no nationwide shortages of food although in some cases the inventory of certain foods at your grocery store might be temporarily low before stores can restock”. Don’t you think it’s particularly annoying when they deny our problems exist or say it’s all “temporary”. What does that even mean? People need to eat today, not in a couple of months, not in a couple of years. If the government refuses to admit the struggles we’re all facing, this means that we’re on our own. To be honest, we have always been on our own. So we can’t afford to ignore the signs that are telling us that things will only get harder from now on. We must wake up and start acting before it’s too late.

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Epic Economist

Epic Economist

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