Folks at the Xiden White House have referred to inflation as a “high-class” problem. Now, when I took ECON 101 many decades ago, I was told that the cause of inflation was too much money chasing too few goods. Of course, the Build Back Better scam will pump even more fiat money into circulation, so that would suggest that inflation would accelerate even more if Xiden’s plan were to pass.
But what if all that money had no goods to chase after? Would that break the back of inflation? Is the supply chain disruption seen as so potentially beneficial by the people in the Administration that they’re willing to tolerate late delivery of their treadmills?
Milton Friedman once remarked that if the government were put in charge of the Sahara Desert, we would quickly have a shortage of sand. The looming supply problem for the electronics industry isn’t a sand shortage but one of silicon metal used to make semiconductors. SMM News is reporting that government imposed power restriction in China are adversely affecting silicon production.
The insufficient power supply will inevitably lead to a decline in the output in Q4. The impact of the dual control of energy consumption is more significant on the supply of silicon. The major silicon metal producing regions including Yunnan, Xinjiang, Sichuan will have to cut the production, where the silicon plants cannot maintain the normal production from September to November. The power shortage also restricts the production.
BTW, silicon isn’t rare; it’s the most abundant metal in the Earth’s crust. Oh, and a vast array of products uses semiconductors. Even the toaster I bought last year uses an integrated circuit as the basis of its timer.
I’m so old I remember when the only significant quantity of magnesium in an automobile might have been a set of aftermarket wheels. That’s not the case now. More and more parts on cars and trucks, including large body parts, are aluminum, and many aluminum alloys contain magnesium. There’s a lot of magnesium in a modern vehicle.
China produces over 80 % of the world’s magnesium. Recent power shortages have severely affected the region where most of China’s production is based, so a magnesium shortage is expected to hit vehicle manufacturers before the end of 2021.
I’m so old, I remember when the Xiden campaign was telling us that Joe would bring the competent adults back to the government to work for him. Putting Mayor Pete, who has no experience managing transportation networks, in charge of the Department of Transportation is another broken promise.
The oceans are full of container ships bound for America with no port facilities capable of receiving them. The FAA and some airlines suddenly have staffing issues. But the DoT has a newly-released Climate Adaptation and Resilience Plan.
Meanwhile, you may want to do your Christmas shopping while there’s still stuff in inventory.