The Breakdown of Supply Chains
The Breakdown of Supply Chains
By Todd Strandberg
All over the world, multiple supply chains have become dysfunctional. A common explanation for why they have broken down is that they all related to the COVID-19 pandemic, and once we get past it, all things will return to normal.
Some are related to COVID-19, but many have zero connection to the virus. They have been building for years, and only now are they starting to manifest. The key reason is that people are making decisions that defy basic logic. There is a direct relation between evil and insanity. As the world gets more evil, people make more insane choices.
For several years the price of uranium sold at $20 per pound even though it cost $60 to mine it. China and India are building dozens of reactors that will increase demand for a uranium market that already has a deficit between supply and demand.
The price for uranium languished at $20 because the world decided nuclear power was bad, and few financial firms wanted to invest in this industry. Everyone in 2021 has suddenly realized that having electricity is a good thing, and so we now have a new love for nuclear power. The price of uranium is now at $40 per pound, and the stock prices of many uranium miners have risen several-fold. Since it will take many years to restore supply, the price of uranium could rise to $400 per pound.
Germany is creating its own electrical production problem with its fixation on renewable energy sources like solar and wind. The German government wants renewables to cover 65 percent of the country’s electricity needs by 2030, a key target in Berlin’s campaign to drive down greenhouse gas emissions and help combat climate change. It has pledged to shut down the last nuclear power plants in 2022 and phase out coal power by 2038.
The nation already has 30,000 wind turbines, and it is having trouble building any more. It has become difficult to find the right type of land to build wind farms. The power infrastructure doesn’t even allow for the flow of that much electricity. Germany’s transmission network can barely cope with the flow of electricity from the wind-intensive northern coast population centers and industrial regions further south.
If Germany wants to reach the 65 percent renewables target, it will need at least 4GW new onshore wind capacity every year. This year we will probably not even manage 1GW.
I fear Germany is setting itself up for a major power production crisis. A huge wind turbine collapsed just hours before it was due to be officially inaugurated. The turbine, whose rotor blades reach a height of 784 feet, toppled over last month in a forest near the western town of Haltern. Germany has cold winters that can produce bad winter storms. It would be a disaster if an ice storm locked up wind turbines for just a few days. It would be an apocalyptic nightmare if the weight of the ice caused thousands of turbines to collapse like the one near Haltern.
Sometimes the breakdown in the supply chain results in too much of a product. In China, there is a massive overabundance of housing. All over China, there are thousands of high-rise apartment complexes that stand unfinished. An amazing 20% of all the apartments in China are currently empty.
The giant real estate company Evergrande has been in the news because it faces bankruptcy. The firm has $300 billion in debt, built up from mania-levels of speculation in housing. If it goes under, it would be the largest bankruptcy in all of Asia.
Beijing is allowing the debt-saddled property developer to fail because it realizes it needs to let the air out of the housing speculation bubble. It may turn out that what the government is really trying to do is let water out of a dam that is in the process of designation.
The U.S. is currently having a record backlog of cargo ships at many of its ports. At the LA and Long Beach ports, it’s a particular problem because this is the main entry point for imports from China. On any day, there could be 75 to 90 ships stuck outside the port. Just a couple of years ago, it was unusual for more than one ship to wait for a berth.
The standard explanation for the cargo ship bottleneck is that retailers are restocking from COVID-19 lockdowns. A better explanation would be that the government paid millions of people not to work, and we decided to fill our needs with greater imports from China. Our trade deficit with China only dipped a bit in 2020 because China had its own lockdowns.
We import basic things like pet food, paper, and prescription drugs from China. It is amazing that people would gladly risk the health of their cat or dog with Chinese food standards. I looked through my kitchen shelves and was alarmed to find lemon juice and hand sanitizer produced outside the U.S.
America has become addicted to imports because of laziness and greed. The only thing we should be importing is stuff that can’t be produced here.
When we return at the end of the tribulation, I know we won’t recognize the world we left. It would probably still be true even without the supernatural plagues and nuclear warfare. Mankind is already on the path toward self-destruction.
“But evil men and seducers shall wax worse and worse, deceiving, and being deceived” (2 Timothy 3:13, KJV).
–Todd