The Monstrous Flow of Free Money and the Shortages

Free money destroyed the pricing mechanism, and demand has soared despite much higher prices.

By Wolf Richter. This is the transcript of my podcast of last Sunday, THE WOLF STREET REPORT.

The shortages are not at Costco or Safeway, though they too might run out of a few weird items here and there. But other retailers are complaining about them, including apparel retailers and shoe retailers – yup, it took five weeks for my running shoes to arrive after I ordered them online, when normally I’d get them in a day or two.

There are shortages cropping up in different types of equipment and appliances and electronics. There are reports of shortages of certain types of fasteners and all kinds of doodads that you’d normally take for granted.

The shortages are all over the auto industry, driven by the global semiconductor shortages that keep getting dragged out and are now expected to abate maybe, hopefully, possibly in 2022.

It isn’t that there aren’t any new vehicles out there, but there are not enough of them. Inventories have been depleted in a historic manner. And customers are buying vehicles as soon as they come off the car carrier, or they order them and wait patiently till they arrive.

There are now huge storage areas around auto manufacturing plants were automakers store vehicles that are essentially ready to go but are still missing a component or two because some chips couldn’t be made, and when those components arrive, they’ll be installed and the vehicles will then be sent to dealers.

These semiconductor and component shortages have shut down auto assembly plants in the US and around the world for weeks at a time, all year long.

So everyone in the auto industry is prioritizing their high-end most profitable units and their most profitable channel, which is retail. The huge rental fleets that together would normally buy close to 3 million new vehicles a year in the US alone, but usually lower-end models, with large discounts, well, they’re being de-prioritized because no one is making money on selling to rental fleets.

Rental car companies have been complaining since the first quarter this year that they cannot get enough vehicles from automakers because automakers are prioritizing the most profitable high-end vehicles that they then sell through their highly profitable retail channels.

Automakers have slashed their incentives, and so effectively, prices of these vehicles have jumped, and dealers are selling hot models over sticker. Dealers and automakers are making out like bandits.

In normal times, demand for new and used vehicles would have collapsed after these kinds of price spikes as most consumers don’t have to buy a vehicle today. They can just drive what they have for a while longer.

But not this time. Now, Americans, after they’ve gotten this free money, don’t mind paying out of their nose for new vehicles, instead of haggling over them as they used to do.

And rental car companies are not getting enough vehicles built, and so there are rental car shortages in some areas. Rental car companies have responded by not selling their older rental units, as they would have normally done, but instead they keep them longer, and the mileage with which they’re now running them through the auction has nearly doubled over the past year. And they’re running fewer cars through the auction.

Rental car companies supply the used-vehicle market with close to 3 million used vehicles a year. And that number has plunged because rental car companies have trouble getting new vehicles to replace their current units. So this triggered the used vehicle shortage.

Then there is the infamous container shortage. It isn’t that there aren’t enough containers out there. It’s that containers are hung up on huge ships that each carry many thousands of containers, and those ships are waiting in large numbers to get into ports.

Yesterday, just outside the ports of Los Angeles and Long Beach, a record 44 container ships were anchored, waiting. And there are hundreds of these ships hung up somewhere globally, trying to get into a port, or they’re being rerouted to different ports. And all this takes time.

And containers are stuck in ports because railroads are backlogged, trucking companies are troubled by driver shortages, and containers are hung up in railyards and clog them up to where some railroads have stopped routing trains to those particular railyards until the backlog is cleared, thereby further contributing to the pileup of containers at ports.

And each extra day that a loaded container doesn’t get to its destination is a day that it cannot be unloaded and returned to the flow of containers, and cannot be sent to a manufacturer that has goods ready to ship but cannot ship them because they cannot get empty containers.

This chaos in the container industry caused the rates of shipping containers from Asia to the US to spike four-fold and five-fold from before the pandemic.

Last week, it cost on average $11,300 to ship a 40-foot container from Shanghai to Los Angeles, over five times the typical rate before the pandemic of around $2,000, according to Drewry.

Clothing retailers have had trouble restocking their merchandise. Some of the big names that complained about this during their earnings calls are Nordstrom and Abercrombie.

Nordstrom said that the brands it sells are having trouble getting their merchandise produced and shipped, and so they were prioritizing selling directly to consumers online, which is a lot more profitable for them, and they’ve de-prioritized Nordstrom, and Nordstrom’s sales got hit because it had shortages in its inventory.

Abercrombie said that the factory upheaval in Vietnam due to the rapid spread of the delta variant is now, quote, “out of control,” as plants shut down to deal with the infections of their workers. Vietnam is the second-largest supplier of apparel and shoes for US retailers.

In terms of shipments, once the merchandise is made, Abercrombie said that it is seeing shipping delays of one to three weeks on average. And it started using air cargo to get around some of the container chaos.

All of this creates additional expenses, and retailers are going to try to pass them on to consumers.

And there has been a shortage of plastics, and prices have jumped to record highs. This started during the big freeze that hit Texas that disrupted the petrochemical industry along the Gulf Coast. It accounts for nearly 20% of the global ethylene production, and three quarters of that production along the Gulf Coast was knocked out during the big freeze.

By the end of February, all of the production of epichlorohydrin was offline, along with 90% of the production of ethylene glycol, 70% of the production of polypropylene, 60% of the production of epoxy resins, and 40% of the production of propylene.

Some plants were damaged during the big freeze. Production eventually and mostly recovered, but then there was the huge backlog due to the production shutdowns.

And now, a hurricane is barreling into the Gulf Coast, and that may entail further disruptions of production.

These materials go into everything, all kinds of consumer goods, from water bottles to automobiles, all kinds of packaging, and all kinds of industrial goods, such as PVC pipe that is used in new construction.

So everyone is prioritizing what they produce because they don’t have enough materials or components or labor to produce everything they could sell. And so they prioritize high-end products, or high-volume products, or high-margin products, and they de-prioritize other products, which might not get produced until this settles down.

Or if a manufacturer needs 10 empty containers to ship their merchandise but they can only get five containers to ship them in, then they prioritize, shipping their high-priority items first, and the other stuff whenever.

This is happening everywhere. When supply gets tight, everyone is prioritizing what gets produced, who gets what, what gets shipped, and when it gets shipped.

All of this is vastly complicated by labor shortages. Whatever the reasons may be for these labor shortages – and I have discussed various aspects of them – they cause real problems throughout the supply chains and transportation systems.

So there are lot of reasons for these tangled up supply chains: natural disasters such as the big freeze in Texas that knocked off several semiconductor plants in Austin for a period and slammed the petrochemical industry on the Gulf Coast; Covid that has shut down factories; a fire at a semiconductor plant in Japan; consolidation in the container shipping industry after the rough period of 2015 and 2016 when several container carriers went bankrupt; material shortages; labor shortages, etc.

All of this could have been worked out more or less, with some disruptions, and maybe a few minor shortages here and there, because shit happens often enough, and companies are prepared for some disruption and know how to deal with them up to a point.

When an item is in short supply, the price tends to jump, which reduces demand until supply catches up, and normally the shortage goes away.

But not this time. This time came the stimulus-fueled historic explosion of demand for goods, not just in the US but globally.

Governments borrowed trillions of dollars and euros and yen and whatever, and handed them directly and indirectly to consumers to be spent, and central banks printed trillions of dollars and euros and yen and whatever, and spread it across the financial markets, which caused asset prices to blow out. After a while, it caused people to spend some of their gains or borrow against their inflated assets and then spend the borrowed money, and the world has never seen a sudden spike in demand for goods like this before. And no one was ready for it.

To this day, the fiscal and monetary stimulus continues, though some central banks have started dialing it back, and the Fed said that it will dial it back, and governments are continuing to spread borrowed money around hand over fist.

As this combination of artificially fueled demand for goods and supply-chain problems spread across the economy, what resulted for all to see were higher prices and in many cases much higher prices. That much could be expected.

What was unexpected was that enough consumers – not all, but enough – were suddenly more than willing to pay those higher prices, particularly for the big-ticket items that they didn’t really have to buy, such as houses and cars.

They didn’t even care about the prices, now that they’re flush with all this free money. This is when inflation took off – meaning when companies got away with raising prices: when higher prices didn’t cause a drop in demand, but might have actually spurred demand, powered the fear of missing out, as money suddenly didn’t matter anymore since it had just fallen into their laps.

Pricing regulates supply and demand, as higher prices normally boost supply and slash demand. But free money has destroyed the pricing mechanism, and demand has soared despite much higher prices.

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  142 comments for “The Monstrous Flow of Free Money and the Shortages

  1. Russell says:

    Excellent explanation. I work at one of those chemical companies along the gulf coast. While we weren’t directly impacted by Hurricane IDA we are scrambling to adjust and adapt.

    Some of our usual suppliers aren’t available so we are having to pay premiums for their raw materials. Some of our usual customers are off-line but we are able to sell on the spot market to others in need and more than make up for the difference.

    You just have to roll with the punches and stay ahead of the game. Those that are flexible are poised to come out way ahead.

    • Nemo 300 BLK says:

      I’m an East Coast solvent-based coatings manufacturer, and because of the hurricane, only one-third of my solvent order is arriving tomorrow. This is on top of all the other shortages such as resins, which are the foundation of any coating.

      Good times.

      • Catxman says:

        All this is good lessons for the various industries that have been hardest hit.

        The U.S. military is the world’s best because it goes to war every few years, knife-sharpening its skills to a razor hone. Now the commercial world is “going to war” with its suppliers to speed up deliveries and learn how to better deal with it the next time. Practice makes perfect.

        • Apple says:

          And yet the US military learned nothing in Afghanistan.

        • 91B20 1stCav (AUS) says:

          Apple-the entire U.S. learned nothing from VietNam. Middle East/Afghanistan is merely a proof of same…

          may we all find a better day.

        • Joe Saba says:

          yesterday I went to 2 suppliers
          carpet – up $2 yard or 25% in past year
          also have freight charge now on orders + bigger install fees

          2nd plumbing supply house
          last year he had to take 3 trucks to Phoenix(from Tucson) because his semi full of water heaters came in 6 weeks late(around 150)
          he sells 200 a month
          I asked what price was on 40 gallon gas(cheapest)
          $505 going to $558 NEXT WEEK
          was $397 jan 2020

  2. MiTurn says:

    “This is when inflation took off – meaning when companies got away with raising prices…”

    One of my hobbies is selling books on Ebay — a great place for a bibliophile, like myself. Not only are companies getting away with raising prices, so is the United States Post Office. I’m watching shipping rates rise seemingly monthly.

    • RH says:

      Too bad you are not a mainland Chinese company, I was told by a postal employee that apparently the USPS has been essentially subsidising with very low shipping rates the shipments from China. That was confirmed by others. Astonishing.

      As to the excellent article, search online “Federal” Reserve and bailout and secret and you will see there the articles as to the many TRILLIONS in bailouts for years, ignoring fractional reserve banking which is a kind of HUGE CONTINUING subsidy to the banksters, received by banksters. Thus, I am not getting excited about the free money given to ordinary Americans recently. Compared to the banksters’ continued thieving of many TRILLIONS for years, it is pennies during a pandemic.

      Like a French man once told me, “Americans love the banksters like devoted, abused dogs and after being abused again and again, are always ready bend down to lick the banksters’ …” LOL. I am American but must admit he is not wrong about most Americans.

      • RH says:

        P.S. I have cleaned up the language of that Frenchman substantially. LOL.

        Now bark boys! Aren’t you good boys! Yes, you are. Yes, you are.

    • RH says:

      When talking about “free” money, we should also talk about the pending, Perdue bankruptcy white-wash, excuse me, “settlement” by with the wonderful ultra-billionaire family that owns the company that promoted the opioid epidemic is about to emerge free of any personal liability and immune from liability. Now, in other countries, the victims’ families might already have exacted personal vengeance, e.g., Italy or Columbia. In other countries, they would be hounded or prosecuted.

      In our blessed country, that family will suffer zero punishment, and probably get to keep most of their profits, if the estimate that only Perdue will be bankrupted and they will keep their $10 BILLION fortune is true. I bet Bernie Madoff must be twisting in his grave, angry that he did not bribe the right people and wound up in prison, albeit he might have felt that prison was the safest place to stay alive given whose money he might have stolen if rumors are true.

      Now, you must wonder what I am talking about and it is a little gem hidden in the news. It is about a settlement that is about to be entered in bankruptcy by 34 state attorney generals (but opposed by 10 others, sort of like the evil empire versus the smaller, opposing, rebel alliance) whereby that family whose company “coincidentallY” repeatedly and for years promoted the opioids that have killed thousands of Americans to its GINORMOUS profit will just utterly escape from personal liability and get to keep their precious, precious, precious, precious BILLIONS in profits.

      I bet that family will use those billions that they will never have to risk paying out in damages, on the 3000+ lawsuits reportedly filed or being prepared against them, for “good” causes: e.g., at minimum, I bet New York’s attorney general will have all of her campaign costs paid for by them through the year 2100, and I would not be surprised if she also got some nice, under the table reward. She is a “good” attorney general, like Eric Holder and the banks.

      Similarly, since LA county superior court judges reportedly demand bribes of 10% to 20% of the damages that they are helping crooks avoid paying (paid to their election committes, while on trips in a certain foreign country of theirs, etc.), I wonder if that bankruptcy judge is soon going to be a secret billionaire. If he takes less than a billion, he is being cheated!

      If anyone remains who is not utterly corrupt in the IRS and SEC, please investigate them. What am I saying? Of course, they probably got their cuts first. Now, I feel silly. As a cherry on top, if any one of you were planning to retire partially on your social security, forgetaboutit!

      It is rapidly going insolvent, more so thanks to the billionaire banksters’ “Federal” Reserve decision to inflate away the social security payments, so unless you are 72 and have cancer, do not make long-term plans to have a home or eat. You may start looking for some good trash cans near nice restaurants, so you can eat out of them when you get older.

      At all costs, we must continue to ensure that our blessed banksters and their billionaire cronies never have to pay more than a smidgen in taxes, not even when their products have directly killed thousands of Americans, like loyal dogs! Say “Woof” if you agree!

    • Michael Gorback says:

      Sorry to go o/t but what kind of books?

  3. The Bob who cried Wolf says:

    We ordered windows for a customer five months ago and they showed up in a timely fashion, but to our surprise there were no screens. We’ve been told that they’re back ordered and may show up this month. Five months for screens? My window supplier said this is par for the course now. Some stuff on-time, other things not so much. This problem is rampant in the construction industry. My advice to customers has been to use stuff that’s literally in front of them at the stores. Do your best to not have to order anything as it’ll kill the schedule. We ordered a cover to a floor outlet box for a doctors office last February, it showed up last week. I could cite one example after another.
    And as for people paying and not seeming to care about the cost, you couldn’t be more spot on. The spending is out of control.
    I know you can’t directly compare one time period to another but I would put us at around 2004-2005 if I had to pick a timeline that reminded me of this, but today is way worse. Too much money in the hands of too many people.
    Broken record here: this won’t end well

    • MiTurn says:

      “I could cite one example after another.”

      My sister and her husband sold their house, bought some land, and began the process of trying to find a builder. There is a two-year waiting list for house builders! So, they decided to go the double-wide manufactured home route. They ordered in April and were promised delivery by August. Now they’ve been pushed back to next spring, no definite date. So they’re going to have to spend a winter in North Idaho in an RV trailer.

      Oh, and still waiting on the septic system to be installed…

      • The Bob who cried Wolf says:

        I failed to mention that I also gave all my employees a raise because I’m seeing piracy by other companies. It’s unusual to give a mid summer raise, very unusual, and it was basically a retention raise. I’ve also been raising rents and have told my tenants they need to tell their employers to pay them more as well. Hyper inflation is here and it’s nowhere near done. Things are only going to get more expensive and if you don’t stay ahead of it you’re doomed.

        • georgist says:

          Alternative: as other costs rise and wages don’t, rents fall.

          Or do rents go up when the economy is good and when it’s bad?

    • Paulo says:

      Just got back from visiting daughter to check out her new kitchen reno. They bought all new appliances a good time ago and had to store them in their living room until they finished the cabinets. They were worried they wouldn’t be able to get what they needed if they waited. Some days you can buy appliances and other times not for months. They sourced stuff all winter before starting their build this spring.

      Oh, and no stimmie money involved. They were outgrowing their house and figured it would be cheaper to do an addition than pay RE fees, moving costs, and actually buy something else/bigger. They have a great place 1 block from hiking trails and 4 blocks from the beach. This time Dad was not the builder. They hired a friend who has his own cabinet business and has done house construction.

      • VintageVNvet says:

        Good anecdote P, pretty much sums up the best or ”least bad” ”remodel process” now and many times in the past few/several decades:
        Worked for the biggest and baddest and best ”remodel” contractor in the SF ”east bay” area during both the oil crises of the seventies, and he had a very very clear policy:
        Don’t start the first ”lick”,, i.e. demo,,, unless and until EVERY item needed was in our warehouse and had been checked carefully for errors, etc.,
        WE ”guaranteed” a complete, total bathroom renovation in one,,, repeat, 1 week,,, and did so many times when I was working there, including the toilet and shower working every day after 5pm,,,
        Kitchens were guaranteed complete in 2 weeks, and ditto, folks had to be able to cook every evening by 5 pm…
        I was frequently ”on the phone” to subs at 0500, before they left their house phone,,, and after 2100, when they got home from the bar.
        And, to be very clear, all our subs were absolutely TOP OF THE Line with re performance,,, as one can only imagine these days.

    • ru82 says:

      I remember as a kid ordering out of a Sears catalog and then usually waiting 6 to 8 weeks for the item to show up.

      We are just going back to the good old days when everyone had patience and did not demand 1 or 2 day shipping. LOL

    • kam says:

      Shortages are directly caused by Government Kovid Policy. Debt and Money printing to pay people to stay home, manufacturing fear, and party like there’s no tomorrow.
      History will call in her chips.

  4. LK says:

    “There are now huge storage areas around auto manufacturing plants were automakers store vehicles that are essentially ready to go but are still missing a component or two because some chips couldn’t be made, and when those components arrive, they’ll be installed and the vehicles will then be sent to dealers.”

    Is there a link to a source with more information?

    • Wolf Richter says:

      This is the transcript of a podcast. But lots of info on this out there, just Google it. You can then also look at the images of those areas.

    • Nemo 300 BLK says:

      Ford has thousands of F150’s sitting in places like the Kentucky Speedway that lack chips. They have since announced they are sending the trucks to the dealers to rot on the lots without chips.

      On a side note, I ordered an Expedition in early March and the salesman called yesterday to say it wasn’t likely to happen this year so I switched the order to an F150 that he said is likely to arrive by the end of October.

  5. 2banana says:

    “‘The stories that we are now hearing about the caution that if you want to have Christmas toys for your children, it might now be might be the time to start buying them…”
    — Kamala Harris, August 2021

  6. historicus says:

    When will the Fed realize they have boiled the frog?

    5% (inflation) is giving the workforce a 5% paycut…and on any money saved.
    This Fed is so rogue, so off the rails ..it is of historical proportion.

    What’s the old saying about riding a Tiger?…..It’s easy getting on, but the getting off is a little trickey.

    • historicus says:

      The bifurcation of our society is manifest…

      There are those who “have enough stock” to make a difference in their lives
      And those who do not “have enough” or NONE.

      Our dependence on foreign supply is manifest…..and a danger to the nation.
      We dont hear “Trade deficits dont matter” mantra anymore. Supply line fragility is one reason it does matter.

      • Moosy says:

        Even with stocks that are screaming higher, the problem is inflation and taxation.

        Say your stock goes up yoy a fabulous 25%, if you are a sucker in California, after capital gains tax you keep 10-15% of that gain. Add inflation and you are in negative territory .

        And that is just an example since it looks like inflation is much higher and we also have that biden proposal to double the capital gains to 40% (+ whatever other taxes they pile on for healthcare, highIncomeThatIsNoLongerReallyHigh)

        • DawnsEarlyLight says:

          A crap load of these ‘stocks’ are pension/401k index fund participants, with no tax incurred until cash out. These ‘no brains required’ participants are adding fuel to the fire. Sit back and enjoy the ride Zombies!

    • drifterprof says:

      “He who rides a tiger is afraid to dismount.”

      It’s the tiger who will decide when he dismounts. The man would best put aside his fears and prepare for it.

    • Sams says:

      Another question, when will the FED realize that the inflation is part devalutaion of the US dollar? By the FED with a little help from overseas.

      And that the helpers may aim to devaluate the US dollar more? Maybe to the point where there is no reserve currency.

  7. 90% of the supply chain problem is in Asia but it has nothing to do with Covid. XiJi is opening a new stock exchange for small to midsized companies. Their command control economy is running a mini cultural revolution, putting people first, but so is the US. US consumers are already overstocked. The global economy is going into hyper-mercantilism. Everyone runs a small business in their home and sells to everyone else. Cross border trade would end? The sickness of consumerism is metastasizing.

    • Anthony A. says:

      This would be like you work for Walmart, I work for Kmart and we sell stuff to each other. Great!

  8. Rick says:

    Wonderful article. It urges manufacturing at home.

    It appears that every segment of society is having a crisis. Leaders seem to be focusing on everything but the mission.

    • Anthony A. says:

      Looks like U.S. VP leadership is focused on Xmas toys for tots shortages.

      • MiTurn says:

        Chinese-made toys for tots. Better fly them in, as container ships might not make it there until Xmas 2022.

      • MCH says:

        Glad the VP has such an important role to play. All must be well if her focus is on toys for tots in Xmas…. Perhaps the next thing she can focus on is riding shotgun on the cargo planes flying plastic dogshit out of Hong Kong.

        Can you name that movie?

        😀

      • Swamp Creature says:

        Anthony A.

        Yep, heard that. This is the definitely the greatest problem facing the USA.

        Reminds me of my old man telling me that the greatest problem in the USA was that lack of ability of the rock & roll generation of the 1960’s to be able to perform ballroom dancing.

      • drifterprof says:

        “Looks like U.S. VP leadership is focused on Xmas toys for tots shortages.”

        That’s some weak bullshit there — you can cherry-pick a statement from any politician and say they are “focused” on it. Give it a rest.

    • DawnsEarlyLight says:

      It tells you how unconnected those in control are to the inner workings of the economy at large. It reveals whose real interests TPTB are ‘connected’, and the chaotic workings of the ‘science’ of economics.

  9. vegeholic says:

    Regarding the “monstrous flows of free money”, isn’t it the case that we have always had such flows of free money to Raytheon, Lockheed Martin, Northrup Grumman, Boeing, etc. for weaponry production, but now some of the free money is going to the wrong people, the little people, with resultant inventory and price dislocations. But the prior free money flows have had their own pernicious and predictable consequences. Maybe we should decide what kind of society we want and direct the free money toward the creation of that society.

    • Nicko2 says:

      Marketwatch has a ‘scare article’ on the front page proclaiming the stock market surges are solely due to small time Robinhood investors. The little people can’t win.

    • Augustus Frost says:

      “Maybe we should decide what kind of society we want and direct the free money toward the creation of that society.”

      Good luck with that. How do you propose to do it? By more voting?

      • Wisdom Seeker says:

        This time will be infamous for the disconnect between voters and Congress.

        But there’s also an infamous disconnect between entrepreneurs and investors vs. the Fed-mismanaged financial markets.

      • p coyle says:

        By more voting?

        AF, you have me cleaning my beer off the screen. well done!

  10. Nicko2 says:

    If there is any lesson here, stop buying cheap junk made in an offshore slave factory.

    Resist the urge to partake in mindless consumerism. A single t-shirt needs to be worn 20,000 times to make up for the amount of water and energy that went into producing it.

    A huge part of the economy is built on a house of cards of selling stuff no one really needs to customers that can’t really afford to buy.

    • Jon says:

      The day mindless consumerism stops American economy would collapse as 67 percent of us economy is consumer spending

      I am minimalist btw..

      • sunny129 says:

        There will be NEVER a Green economy until Consumption economy model is replaced with ‘sustainable/recycling’ economy. But no one wants to admit this congnative dissonance!

    • Danlxyz says:

      Then you would have to wash it 20,000 times.

      • roddy6667 says:

        How many t-shirts would it take to use all the water in the Colorado River?

        • DawnsEarlyLight says:

          How many t-shirts would you need to ‘wring out’, to power the Hoover Dam?

  11. Petunia says:

    We went out last weekend to the BBQ place in our town center. Every restaurant was packed and had long wait periods. Although this scenario would imply spending money was in ample supply, you wouldn’t know it by how people were dressed. I could buy better outfits at Goodwill for $10 or less. I felt overdressed in stretchy pants and top, and I wasn’t even wearing my going out flip flops. The clothing shortage must be a crisis.

    • Jack Hank says:

      My wife is into fashion and has been complaining about this for many l months now. She came home from Nordstrom’s a couple weekends ago and she said there was this little old lady wandering around Nordstrom’s looking confused, so my wife stops to talk to her. The little old lady says “where’s all the clothes?” So my wife explained the situation.

    • Anthony A. says:

      Our restaurants are packed daily too. What gets under my skin are the guys wearing baseball caps while eating. Some even have them on backwards. Where I come from, no guy would wear a hat in a dining establishment.

      Maybe I’m just too “old school”, so to say?

      • Harrold says:

        Nobody has a hat check like they used to back in the 1940s.

      • California Bob says:

        Don a baseball cap your IQ drops 10 points*

        Wear it backwards your IQ drops 50 points.

        If it’s a Raiders cap your IQ goes negative.

        * Disclaimer: I wear one when I work on the farm (high IQ not required).

    • Augustus Frost says:

      Actually, most of these people are probably just slobs.

  12. Dudu says:

    Just a different kind of market crash.

    2021 – market inflation, commodity inflation, real estate inflation… etc -> everyone getting a pay cut

    2008 – deflation, real estate deflation, car industry deflation… etc -> asset devaluation, no disposal cash available…

    • SOL says:

      This makes too much sense. Everyone is looking for the crash, but it’s all around us happening as we speak.

    • sc7 says:

      This is what I have been saying here… Everyone is waiting for the big, deflationary crash. We are crashing in a different way, upward, due to a massive fed overshoot and a reckless, poorly stimulus program.

      • georgist says:

        Yep this time it’s a crash for the boomers.
        Loaf of bread $15, no more avocado for you.

      • sc7 says:

        @georgist:

        Completely agreed, this inflationary spiral is poised to hurt retirees with conservative investments the most of anyone. It is very much a shame for those who tried to responsibly save their whole lives.

  13. David Hall says:

    Ample food supplies.

    Some more home listings in my community, but home prices rose again in the most recent report. Evictions have started again.

    Amazon has speedy shipping, many in stock items.

    I got a chair from Staples online, free next day delivery.

    • Ethan in NoVA says:

      Locals on Reddit are saying rent renewals are going nuts. Landlords are trying to stick it to the tenants hard. I guess landlords are jealous of what is going on over in the home sales side.

      • Nemo 300 BLK says:

        The landlords have to make up for the deadbeats who refuse to pay rent and self-evict.

      • Depth Charge says:

        They can try to do whatever they want, but that doesn’t mean they’ll succeed. Incomes are what rents are tied to, not what greedy landlords “want.”

        • sc7 says:

          In many places, Boston included, they’re getting it just fine. A lot of reports of bidding wars for apartments. Bidding on how many hundreds PER MONTH over the listed rent price you’re willing to pay, just to get a 100-year old, rundown place to live.

          Meanwhile, new construction “luxury” buildings have numerous empty airboxes because they refuse to lower the price from $5k for a 2br.

          All of this has been created, propagated, and enabled by the fed.

        • Harrold says:

          Sounds like employees are paid quite a lot in Boston these days.

        • Depth Charge says:

          “A lot of reports of bidding wars for apartments. Bidding on how many hundreds PER MONTH over the listed rent price you’re willing to pay, just to get a 100-year old, rundown place to live.”

          Sounds like REALTWHORE drivel. All of these “BIDDING WAR!” narratives are just that.

        • sc7 says:

          @Harrold: That is very much the case. Unfortunately, for those not at the top of the pay scale or those who haven’t locked in property, it is only getting worse and worse. I sympathize with people who listened to the “wait and see the next leg down” narrative in 2012. Their rent has doubled (or more), while their friends who bought property have seen their equity double against a nice, low monthly payment.

          @Depth Charge: What a compelling argument.

      • Swamp Creature says:

        Agreed

        Ethan in NoVA
        This was a comment on a previous Wolf article, but it fits here better.

        Bidding wars now hitting rental properties

        Because housing affordability in the Swamp has put a lid on home price appreciation the price inflation has now shifted to rents. First time home buyers especially have been priced out and have shifted to looking for a place to rent in a good neighborhood and not in a crime ridden slum where you can still get an affordable property. This had led to bidding wars on rents for rental properties. Its not unusual for a landlord to take dozens of applications and auction off the rental contract to the highest bidder after pretending to check their credit worthiness. I believe this is illegal but they are doing it anyway. This data will begin showing up in future housing rental data. The gap between market sales and market rents will narrow, and it is happening already.

        • RightNYer says:

          I’m sure that’s true in NYC, Boston, DC, and some others, but I have a hard time believing that’s true nationwide.

        • Swamp Creature says:

          RightNYer

          It will become the norm nationwide. Trends usually start in Boston, DC, NYC, and SF.

  14. Sierra7 says:

    Great article about the present parts/purchasing situation.
    Thinking about what kind of a society we have just propels me into an intellectual, “….Thousand Yard Stare!”
    One commenter above mentioned something about ordering early for Christmas……..Holy Red Nose Leader!
    Ok. I’m not a “normal” consumer, nor am I a “normal, accepted thinker”.
    From day one when our first grandchild was born and thru 15 more, along more than 20 years I never bought any of them one frikk’in “toy”.
    Books. Books. Lots of them. Every Christmas….nothing but book gift cards. Their parents bought enough toys for them; there was no lack!
    And, today all that brings smiles to my face because all of them, ALL of them are readers!! And they can write tolerably also. That’s mostly because they are readers.
    I know I’m a hard nosed retro-person. Grew up during the Great Depression; observed how my extended family struggled mightily to keep a “job” and keep food and shelter devil away from the doorstep.
    Our consumer society is shallow, empty, vacuous, and so, so long term self destructive!
    There’s a neat line in the original movie, “Wall Street”…..The “floor” manager of the principle stock brokerage site in the movie is contemplating why so much “turmoil” in the markets….”Too much God#$%^ free money out there!”
    True.
    Our system of “capitalism” practiced needs periodic collapses and doses of “Castor Oil” (A severe purgative)
    for the general economy to maintain any “long term progress”. (“Progress can lead to extended debates”)
    For capitalism to “succeed” it needs unlimited natural resources, willing millions to endure from abject slavery in workplaces to a smaller percentage to reach the “(today) multi billionaire status”. And, if you fail for any reason, well….good luck in the next world.
    Before I continue: I’m a capitalist. I’m also a street rebel against the abuses of labor.
    I’ve said it before; Capitalism is a game.
    Games need rules.
    Our financial geniuses have destroyed too many of the rules and we are in the mess we are in because of their greed and outright ignorance.
    The shortages of today are directly/indirectly connected to “globalization” modified and chopped up by the Covid
    health issue.
    If the remaining monies are chasing the “too few goods” scenario, then the solution is STOP ORDERING and trying to buy what you don’t really need! That’s for consumers. How much junk can you stuff into your house, garage and then in the rented storage unit in the next county????
    For businesses it is a nightmare. Family has involvement in multiple business scenarios. It is affecting them like the Covid rules and regs. They are adapting.
    Adapt. Don’t try to consume what you don’t need.
    Make it a life’s habit.
    All this “free money” will inevitably end. The financial “overseers” we have are doing what comes naturally: avoiding taking that “Castor Oil”………
    We passed that opportunity to redirect our system back in “08-“09.
    Up here in the foothills of the Sierras we are experiencing new obstacles to our “dream lives”. The now constant threat of forest fires; energy disruptions which are now becoming a medium to major nuisance, the ravages of the new “rental” scenarios such as AirBNB which allows renting to large groups of individuals/families placing untoward burdens on the basic civic infrastructures until something breaks.
    But, I guess this is what we get for having a somewhat “free society”. Beware crossing others’ “freedoms”!
    Ain’t America Great?
    Keep up the good writing, Mr. Richter!

    • drifterprof says:

      Good rant. You grew up during the depression and seems like you’re still pretty much firing on all cylinders!

      “Thinking about what kind of a society we have just propels me into an intellectual, ….Thousand Yard Stare!”

      I don’t experience that because as time passed I thought of American society less and less as a something that I have. Long ago American society started becoming something I felt less and less participation in, respect for/from, or identification with. More a society I observe from the outside.

  15. MCH says:

    This inflation is just transitory…. transient… or screw it, just call it trans, the wording starts off the same anyway. It will be more aligned with modern language where we shorten words like suspect to sus….

    Give it a bit of time, the Feds can morph words until no one has a clue what they are saying…. Oh wait… it’s already that way.

    We can get sentence like: the in we see today is trans, our focus is on the unemp nums.

    • BuySome says:

      The only thing that’s been “trans” for the last half century has been that “sweet transvestite from transsexual Transylvania”. With that in mind….”And crawling on the planet’s face, an insect called the human race, lost in time and lost in space, and meaning.”. Now everyone cram into the transducer field for a swift jump to the future. After we’re all thawed out it’s going to be a world no one recognizes anymore with each left down to nuttin’ but their skivvies and takin’ a big bath.

  16. Depth Charge says:

    The money isn’t “free,” though. It stole the future of the young.

  17. MB says:

    My house is still worth less than it was in 2015. My wages are flat for years. I didn’t get a single cent of stimulus payments. Where is the money coming from to cause inflation? I am poorer than I ever have been.

  18. LM says:

    What a monstrously entertaining batch of comments!

    I love this blog—me, the misplaced writer amongst you who found Wolf Street in the midst of a home search (still unfulfilled) as I was seeking someone to speak the truth about the economy.

    • MB says:

      Come to Regina. Average family income is over $100K and there are plenty of houses available for $100K.

    • Dudu says:

      The article is just half the story. Reader’s comments is the other half.
      I guess that’s what makes WolfStreet so valuable for readers.

      • jon says:

        I come here mainly for the comments! :-)
        But WR’s articles are great!

        • Michael Gorback says:

          The comments are good because the crap gets weeded out. That requires a ton of work.

          If the mug shortage ever resolves make sure you back up the truck and get a bunch to support the site.

          Great wedding or bar mitzvah gifts! Also suitable for goldfish.

          Collect them all, even though there’s only one version. IMHO Wolf should issue a Specialty Re-Opening Edition where “heck” is replaced with “hell”. Limited edition, maybe an NFT?

  19. MB says:

    Rents here fell last year and the landlords are desperate for tenants. I’ve seen as much as 3 months free rent if you sign up.

  20. Tom Jones says:

    Another reason people are willing to pay whatever for what they need or want,,,there is a sense of doom and that things are never going to get better, politically, financially, or environmentally, so get what you can, while you can. We all know money is worth less each day. People suddenly realize it’s not just toilet paper they need to stock up on; but everything, while it’s available; a sense that things are coming unglued. Psychological as well as monetary pressures to get desired or needed products,

    • GLD hodler says:

      This sense of urgency and impending doom is what drives inflation. There’s no going back.

    • Nicko2 says:

      Gotta keep away from network news, doom sells.

    • georgist says:

      Americans are quite mad. Remember when you were all fighting over toilet paper, a few weeks back? Everything is borderline hysteria.

      • COWG says:

        Just saw where the aliens from the planet Moronia are doing it again…

        • georgist says:

          I’m afraid they are not aliens, they’re a direct product of your culture and w weak education system.
          The same thing that l leads to people buying horse drugs.

  21. Citizen AllenM says:

    Nothing goes to heck in a straight line…including inflation.

    So many powerful deflationary forces that it took this massive stimulus to generate any real inflation, and everyone anticipates that it will instantly be the 70s show. Remember when the big bank bailout of 09 was going to lead to permanently higher prices? So, it took a decade for houses to finally recover and surpass 05 in a lot of places. Meanwhile, small inflation grinds on, but the big galloping stuff is going to age like the boomers, slowly, and then it will be gone.

    Look at the size of the stimulus necessary to achieve momentary full employment….and that is Japan written in capital letters….

  22. TheFalcon says:

    These out of control consumers have created an environment like Duke & Duke traders buying frozen concentrated orange juice futures. It’s a fabulous time to sell. Eventually it will be a fabulous time to buy.

  23. Tony22 says:

    Wolf, what’s to keep rental car companies from rebuilding their vehicles to extend their life? Yes, it would require buying service centers and garages, but wouldn’t it be cheaper in the long run?

    How about special “Severe Service” vehicles being purchased, like the models that police and cab companies buy, cars that are on the road 24/7/365, except for maintenance?

    Checker Cabs were built like tanks and lasted for decades on the road. Imagine the change we’ve seen in the economy and society in the last five or ten years continuing at the same pace into the future. It’s going to be a different world out there.

    • Sam says:

      Not in their “wheelhouse” of abilities (service centers demands/logistics).
      Senor Wolf would be far better at explaining how (& why) the financials work for rental vehicles companies.
      Folks better not need to have service on your late model vehicles as (cheapest) parts are sourced (Auto mfg & secondary channels) from Asia and the pipeline flow is vague of late.
      “Made in MX” considered high end quality.
      Owners of Euro & US mfg vehicles are having “religiou$” experiences when replacing essential plastic parts sourced from the lowest cost vendors, Relayed from a repair shop I’ve known for decades.
      Btw hemmings.com/stories/2017/01/18/reborn-checker-production-expected-to-begin-in-2018
      IF they (Reborn Checker) sketched their premise on the back of a cocktail napkin, their IPO would have already been done two years ago. Jmho.

    • Wolf Richter says:

      They don’t need to be rebuilt. Cars are still good with 120k miles these days. Rental car companies are already averaging 80K miles on their at-risk units (that they have to sell themselves) when they’re run through the auction. They could be in service for $120k miles. But there are lots of problems with that scenario, including that customers like fairly new vehicles when they pay $600 a week. They don’t want something with 120k miles on it. If that happened to me, it would be my last rental car ever from that company.

      • MCH says:

        It’s funny, you would think that it would be easy to scale those values. A car with a 80K miles would rent less than a car with 50K miles, and so on. I’ve had rentals with 3K miles on it, but honestly, I just needed a set of wheels from A to B.

        Couldn’t have cared less if I had one with 80K miles. You can do a pretty good interior maintenance and still make the car look nice.

        I think the highest mileage I ever saw was like 40K something, and it was a mom and pop shop.

      • Swamp Creature says:

        In 2006 I rented a car from Enterprise Rent a car after my new Nissan was hit by a teenage driver on a cell phone. The rental vehicle had a foul odor, and had dog poop remnants in the trunk. I got suspicious when I noticed Enterprise rented me a Nissan Sentra which is not in their normal inventory. Just for the hell of it I ran it through CARMAX and found out the car was a Luisiana flood vehicle which was taken out of the water after Hurricane Katrina. That was the last time I ever rented a car from these crooks.

        • Wolf Richter says:

          Swamp Creature,

          ==> “… ran it through Carfax” with an F, from back in the day when we used to get the reports by fax from Carfax.

          Carmax is a used vehicle dealer chain.

        • Swamp Creature says:

          Carmax….. Carfax….. who cares. that doesn’t change the fact that the car was a piece of s$it.

        • Wolf Richter says:

          Yes, but it’s VERY confusing for people who know what Carmax is.

  24. Halsey Taylor says:

    Driver shortages? The same ones which appeared when electronic log books were implemented?

  25. DR DOOM says:

    We are a booming!!!!…..The Fed sees these shortages as boom times. If a pair of shoes takes 20 weeks and cost $500 that’s really suuuuuuper booming because the shoes after a hedonic adjustment for the Led Lights that a flashy media mogul might like actually only cost $10. Free money! No Rent! and Mortgage payments , fer getta bout’ it ! This is what we all deserve as Americans because of the Cracker Jack Congress we elect does not give a shit about sound money. Therefore, neither do we. Whee! Whee! as my new best friend Maxwell loves to say. Congress can get all the fiat they need and even more, much more. We love it that they do well . One day we might get to touch thier Tunic. My wife said it is time for my medication and my 15min allotment on the net has expired. I am feeling much better.

  26. patrick says:

    anecdotal evidence – our neighbor ordered new windows in feb of this year and was told installation in june – it is now september no windows and no word on delivery/installation- friends went to colorado on vacation $700 in airfare – $4000 car rental !

  27. Xavier Caveat says:

    Yeah there’s oodles of free money, but I can’t get no gratisfaction.

  28. SocalJim says:

    On top of this, we have SB9 and SB10 in California. All they need is a signature. They allow lot splits with a duplex on each … with ADUs to boot. Imagine what those beach close SFR homes with backyards will be worth. Just wow. This topic deserves a discussion.

  29. sunny129 says:

    How many pairs of shoes, sandals, apparel, phone, tv ++ do we need each year? unable to differentiate NEED from WANT!?

    The future belongs to the minimalists. The rest go on binging buying stuff over stuff, each year! Declare Bkcty and re do it all again! American exceptionalism!?

    Kept my old car for 20 yrs and the current one is 10yrs old and good for next 10y!

    Desire is the root cause of sorrow – Buddha

    • drifterprof says:

      Buddha’s “desire is the root cause of sorrow” is about unhappy people (which the world is mostly filled with) who *desire for things and events* to make them happy, but which actually make them more unhappy.

      There are “Binding Desires” (which if not satisfied tend to make you miserable) and “Non Binding Desires (don’t lose your peace of mind).

      Desires like wanting a cup of coffee are not a root of sorrow. Desire to live in peace, and enjoy the beauty of nature, is not a trap like the blinding desires.

      • p coyle says:

        desire to live in peace, and enjoy the beauty of nature…

        i can only speak to my observations of the good ol’ usa, but neither of those desires seems to be of much import to the average merikan these days.

        people seem to want to live in conflict. i don’t do social media, but i am aware, both from acquaintances that participate and links in articles, that is becoming a more toxic us/them environment. i see no evidence of the masses trying to live in peace.

        and while the last year plus has everyone going to the national parks, most of them are there because they couldn’t go to bali, europe, thailand &c. but they had to go somewhere to post to the internet how much fun they were having, not so much to enjoy the beauty of nature, but to coopt it for personal aggrandizement.

        that’s my personal cynical take on things.

        we need a new buddha, not the charlatans we get presented with every four years.

    • sunny129 says:

      Desire is the root cause of sorrow – Buddha

      ‘Desire’ in this context is possess things/stuff etc – Consumption Economy.

      PEACE comes from within and from without and NOT from some one or a thing.

      • 91B20 1stCav (AUS) says:

        Sunny/drift/pc-aye, but it may not be how strong a want of ‘things’ per se (after all, wouldn’t one just enjoy the possession/use of a ‘thing’), but the associated and intoxicating emotional charge (remember your childhood, here) of saying/demonstrating “…I have this ‘thing’, and YOU don’t!!!…”.

        may we all find a better day.

  30. Swamp Creature says:

    All those who have been wishing for J Powell not to be re appointed Fed Chief next Feb should be careful what you are wishing for. His replacement is likely to be Ms Brainard who is far worse than Powell. She is far to the left of Powell and is on record as favoring expanding the dual mandate of the Fed to include a third mandate. That would include a social justice mandate and all that implies. You may look back to the Fed of today as the good old days. Enjoy.

    • ivanislav says:

      Good. Burn it all down. The faster this clown show falls apart, the better. I don’t look forward to the process, but we might as well get it over with. And I would like the people who put it all in motion to still be alive to reap what they sowed.

    • Depth Charge says:

      I don’t think it can get any worse.

    • MonkeyBusiness says:

      Protracting things is worse than just getting the whole thing over with.
      Print 30 trillion at once and see what happens.

    • #42 says:

      Good comment JC. Nixon cutoff any relation to Gold to pay for LBJ’s “Great Society” and here we are, an Entitlement Society going down the drain. Prudence on the part of the FED in any facet is to be welcomed. Utopia is not an option.

  31. Catxman says:

    All that tsunami of free money is going to rise the economy high for a solid two years once the pandemic is gone from these shores.

  32. Swamp Creature says:

    How many people read these comments on average?

    • JoeC100 says:

      I do daily – this is on my list of maybe four “must reads”. I see no other access to “real world” news from people doing real things like making and building stuff..

  33. georgist says:

    I went onto Adidas and ordered a pair of running shoes from 2 seasons back. They arrived at a discount, in 2 days. They are really good.

  34. georgist says:

    I still think Snider is right – deflation.

    • Wolf Richter says:

      People have been scaremongering about deflation my entire life, and my entire life, there have been about three quarters of deflation. The rest of the time, there was inflation, and many years of LOTS of inflation. I’d love to have a little deflation, but that’s just wishful thinking.

      • georgist says:

        Fair response, I have a lot of sympathy with the points you make.
        I think it won’t be too long until we know, feels like things are coming to the boil!

      • Yort says:

        Wolf – Instant and unexpected currency devaluation could create a “deflation reset” for certain countries, or even the entire global monetary system, if well coordinated. Also a “Great Reset” debt jubilee could be instant deflation for the entire world, as everyone will suffer for a very long time if that is the ultimate end game when no other feasible options exist…

        Look at a 200 year chart of deflation/inflation in America, it was pretty much stable dollar via uniform inflation and deflation until the Fed mafia was created, and then the entire monetary system went full debt-tard after Nixon broke the gold standard, and then we get credit cards, auto lease rent to own everything, and debt out the wazoo 1980s Regan-omics that has never stopped up to this point…which created a “Greed is Good” idolized cult “success in America” system by dropping the top Federal Tax rate from 90% to 38%, and creating thousands of God complex Billionaire narcissists over the last three decades, who now can control the entire monopoly game via political bribes and other measures as the elite class literally are mentally ill money hoarders who can not stop or control their behavior and usually keep hoarding up until their very last breathe in order to win this bizarre game of American monopoly.

        So yeah, I’d be amazed if we do not get a huge deflationary “great reset” in the next 15 years…and sooner if there is a crisis on a global scale that stops the global Fed cartel from buying each other’s debt to keep this crazy debt Titanic afloat…

        The global Fed cartels are simply rearranging the money printers on the deck of the Titanic right now…while the govs plays soothing orchestra stimmi-music to distract everyone from paying attention to the sinking ship…as the rich take the few precious lifeboats and fill there pockets with their precious gems while the poor get locked in the lower decks with the livestock animals…

        They want everyone to believe the Fed is unsinkable…yet place your bets, just in case…or simply stay off the Titanic, which is much easier…

        • historicus says:

          Inflation pausing, or even regressing for a while is NOT deflation any more than a down month in stocks is a bear market.
          Deflation is unlikely…..and when has deflation ever really occurred?

      • Alex says:

        Fair point, but people are forgetting we are witnessing an epic collapse of birth rates in most of the world too which will play havoc with any inflation.

        • Wolf Richter says:

          Alex,

          Collapse = small dip? Birthrates have been declining in most developed countries and some developing economies for many years. And that’s a good thing, given that the global population has tripled during my lifetime, from 2.5 billion when I was born to 7.5 billion now. Humans have gone nuts! Birth rates have been declining in many countries where inflation rules, including Russia and China.

          The equation of population decline = deflation has been proven wrong.

  35. Jack says:

    Wolf,

    How many pairs of shoes does a MAN need?!

    Did you really need it?

    Why add to the dire situation of shortages, and congest the system even more? 🤣

    When will the Americans learn to be more prudent with their money?

    When will they stop funding groups like the turbaned talibans?!!

    When are the masses see through the BS that the swamp is feeding them through the drip?

    How long do you think you can maintain this charade?

    • Wolf Richter says:

      Jack,

      I should post a photo of my old running shoes. They are in shreds, with pieces coming off. Yes, I really needed running shoes because I don’t want to run barefoot.

      There are other things that I don’t need but that I want, such as going to dinner with my beautiful wife and having a great time in a good restaurant with her. Or going on vacation with her.

      Then there are things that I don’t want but have to get anyway, such as a replacement for my implant (molar) that is now going bad.

      You see, an economy is about making money circulate. Every business and every job depends on it.

      • Jack says:

        🤣🤣🤣🤣

        I know Mr Richer, if 20% of Americans were like you sir, we wouldn’t be in this conundrum.

    • drifterprof says:

      “How long do you think you can maintain this charade?”

      As long as the world keeps participating in dollar as reserve currency, letting American Federal Reserve inflate it, to rip off all the foreign suckers with dollar reserves and who bought treasuries, etc.

      • Jack says:

        Update yourself on Mr Richer’s latest version on who owns the Trillions of the US DEBT Sunny!

        After that come back and argue about Foreign ownership of that debt.

        • drifterprof says:

          I’m well aware of Mr. Richter’s recent article, and was aware of the distribution of Treasury debt owners before reading the article.

          That data does not negate the fact that U.S. can screw other countries by what happens when the dollar is inflated while being the world reserve currency. Sure, the U.S. is screwing institutions like Social Security, in addition to other countries. Nothing new there.

  36. Island Teal says:

    The SEC was mentioned way up above. How many are actually aware of where Gary Genstler, JB appointed top dog, used to work?
    It was as the head of the CFTC.
    Look at what they accomplished re price manipulation 🤑🤑🤑

  37. SUS says:

    Can’t feel sorry for General Motors, they had a semi-conductor plant “Delphi Electronics” in Kokomo for years. Now down to a skeleton crew.

  38. Richard H Caldwell says:

    A brilliant piece — it should be reprinted and reposted far and wide. It is a brutal exposition of the extreme fragility of widely-distributed, tightly-coupled, and intensely-specialized production. Thank you for the excellent analysis and synthesis.

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