Re: The worst decision of the pandemic. Get ready for empty shelves!
Originally Posted by
fantasyhockeygeek
I won't take a political stance here... but inflation is baked in for the next 5+ years, simply based on three things:
1. chronic underinvestment in the supply side of hard assets over the last 10 years: fertilizer production capacity --> food cost, battery metal production (copper, nickel, tin, zinc) --> electrification cost, commodity metal production --> construction cost, fossil fuel production (which still is more than 50% of the global energy mix, and will persist under even the most optimistic green energy production scenarios) --> energy cost. All of these things take 5-10 years to bring meaningful production online and have been chronically starved over the last decade.
2. loose money and distribution of wealth to capital owners (ie "the 1%")... the pendulum always swings between labor and capital. It's swung pretty far towards capital, so it's going to swing back towards labor, as it always does. All these labor shortages and supply disruptions are really just a function of the cost. Having trouble finding workers? The unsaid thing there is "... at the wage that's being offered". We're going to see a longer term secular uptrend in labor cost.
3. inflation is what the world's debtholders (govt, corps, individuals) need, otherwise we're going to have massive disruptive disorderly defaults. The only way to make $30 T in US debt (as an example) manageable, is to make that not a lot of money. Persistently negative real interest rates (ie the rate of inflation outpaces interest rates... eg 7% inflation, 3% interest = -4% real rate) are going to be with us for quite a while here. This is what policymakers are targeting, because the alternative is extremely undesirable politically.
The pandemic is just a symptom, and perhaps accelerated a lot of these trends... but these were baked in as an economic reality long before the pandemic.
(IMHO)
I agree. the Pandemic has defiantly accelerated it but it's funny I was called to do an interview a couple of years ago about what Canada's biggest issues are now and in the future. This was before the pandemic but I said jobs. I am luckily gainfully employed, always have been but I see the lack of opportunity everywhere. You nailed it about the Oil and Gas industry.
If you look at our GDP it's still the largest industry in Canada by far and were fighting it tooth and nail. Which is fine we need to eventually pivot but it seems were doing so blindly. Where are all these green jobs or alternative jobs coming from? Were a commodity producing country, that is under investing in producing.
12 Team Keep 5 (2 F, 1 D, 1 G, 1 Any) G,A,PTS,PPP,SOG,HITS,PIMS,W,GAA and Sv%.
F: Kucherov, K.Connor, J. Hughes,,J.Guentzel, A.Svechnikov, C.Giroux, T.Terry
D: Q. Hughes, A.Pietrangelo, J.Carlson, A.Ekblad, Sanheim
G:Bobrovsky, Ingram