Opinion from a Libertarian ViewPoint

Doug Casey on the Real Story Behind Collapsing Supply Chains and What it Means for You

Posted by M. C. on August 21, 2021

IBM used to have a motto: Machines should work; people should think. That’s great. Except most low-level employees doing dog work aren’t good thinkers. And in today’s world, a lot of them won’t even want to work. We’ll have an increasingly large number of what the communists call “useless mouths,” which can be easily transformed into what they call “useful idiots.” It amounts to a sociological time bomb.

by Doug Casey

International Man: The COVID hysteria and the shutdowns have caused supply chain disruptions. Central bankers and the media were quick to pin the blame for soaring inflation on these disruptions.

It seems like sophistry—a fallacious argument with the intention of deceiving. What is really going on here?

Doug Casey: Government officials always want to be seen as smart and action-oriented. Whenever anything untoward happens, they like to step up and pretend to be saviors.

Today’s public thinks that the government not only can but should run the world. The COVID hysteria is a custom-made excuse for them to do so. Unlike people who produce actual goods and services, however, government employees can only take other people’s property and tell them what to do.

Because the essence of government is coercion, they can solve problems only by creating more problems, and new problems provide excuses for more intervention, making the government look even more necessary.

COVID will go down in history as more than just another mass hysteria. It’s likely to be classed as an episode of mass psychosis. It’s the Salem witch trials times a million. It is even bigger than the Great Cultural Revolution in China. The public has been convinced that a dangerous—but relatively minor—virus is going to wipe out the planet, and now, on top of the virus, we have to deal with experimental vaccines, which are likely to be made mandatory, either directly or indirectly.

Vaccine mandates amount to lighting a stick of dynamite in a nitroglycerine factory. That’s true politically, economically, and perhaps medically.

International Man: In her recent comments about the state of the US economy, Secretary of the Treasury Janet Yellen said:

“There are also bottlenecks in certain supply chains, and mismatches between supply and demand have led to price increases. And yet, the data indicates that these mismatches will resolve with time as more businesses are able to keep up with demand.”

What do you think about the US government’s explanation for higher prices and the economic situation?

Doug Casey: Higher prices in today’s context are essentially a matter of monetary inflation—money printing. The Fed is printing up 120 billion dollars every month to fund the government’s deficits.

If you increase the number of dollars in circulation, of course prices are going to go up. And it’s not a so-called transitory phenomenon.

It’s interesting how “the narrative” works. A neat new word comes up and quickly becomes a popular meme. All the talking heads repeat it, reassuring each other. But this isn’t transitory; it’s growing and will get completely out of control. If they slow money-printing, they risk a wholesale deflationary credit collapse.

As far as the bottlenecks are concerned, the COVID hysteria created them. We still have about 9 million unemployed able-bodied people. Most were producing goods and services 18 months ago, but now they can stay at home, watch TV, and use their stimmy checks to gamble on RobinHood because they don’t have to pay rent. Something like 7.5 million households haven’t had to pay rent, and maybe 2 million haven’t had to pay their mortgages. Landlords are said to be out like $60 billion—they can sue, I guess, but that money has been frittered by deadbeat tenants, many of whom will soon be living on the street. But that’s another story…

In any event, less is being produced and more’s being demanded because of all the money being printed. But it gets worse. Modern economies have long and complex supply chains, where everything is expected “just in time” to cut inventories and improve efficiency. A problem arises if a force majeure eliminates a critical component. For instance, take a microchip for a car; cars have thousands of them, and if some are missing, the whole production line stalls. If Burger King can’t hire cooks because of COVID, meat-packers have to close production lines, cattlemen are stuck with cows, their feed producers don’t get paid, and ripples spread. “For want of a nail,” as Shakespeare noted in Richard III.

Mandates to be vaccinated—apart from creating antagonism—ensure many workers will quit, creating more bottlenecks.

See the rest here

Be seeing you

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