What Will Happen After The Supply Chain Breaks

If you are paying attention to the news cycle nowadays, you can see that it moves incredibly quickly, hence writing about current events is almost impossible.

For the past two months we had the SARS-Covid19 extravaganza pushed on us 24/7, but today is a police shooting stealing headlines, and tomorrow, well, no one knows. Obviously, we are exaggerating a little bit, for dramatic effect; however, we believe that this pandemic crisis has the potential to develop over the next year (or more), i.e. this is not over yet and on a long time-line, we predict that major developments are almost inevitable.

To begin with, there’s the so-called lockdown issue; the term lockdown is borrowed from the penitentiary system and it’s hardly compatible with living in the free world; moreover, this is the first time in history when governments forced people to stay indoors to mitigate a so-called pandemic. Until now, only sick people were quarantined, while the strong and healthy continued with their daily lives. Keeping people indoors with the “2 weeks until reopen” mantra being continuously pushed in mainstream media to keep them docile and placated had only worked so far.

It’s only a matter of time until the general public becomes fed-up with this situation and civil unrest is to be expected if we don’t reopen the economy soon. This is an interesting subject on its own, and by that we mean the “reopening” thing. It’s scientifically proven that our immune system gets suppressed if we live in constant fear, due to stress, and also if we avoid social contact. Moreover, our immune system must be “trained” regularly (read exposed to viruses and bacteria) to keep us healthy, and we require fresh air, physical activity, and sunshine to maintain optimal health. Staying indoors while being assaulted with fear-porn via mainstream/social media constantly is hardly optimal for our health and well-being, not to mention the current obsession with using disinfectants, washing hands obsessively, and all that nonsense.

Which brings us to the next issue: what happens when we start all over again?

Here’s one possibility:  we will see a spike in the community spread infection numbers, and some people may die. That’s only natural because social isolation was a bad idea from the beginning, and I bet that mainstream media is already preparing for a big “WE TOLD YOU SO, you should’ve stayed indoors until 2023”, i.e. we reopened too soon, etc. But the problem with keeping people indoors on “universal basic income” of whatever flavor is going to devastate small and medium businesses. Keep in mind that the US economy is a service economy, and Trump’s small business stimulus package was a dud that burned up in a week. At the same time, too big to fail corporations are getting trillions of dollars, while small businesses are getting crushed.

If you do the math, that means fifty percent of US jobs are literally on the chopping block, and even if we open the economy tomorrow, many of them will not return due to the current economic model: extensive debt obligations and razor-thin margins of profit. As some in the liberty movement like to describe it, the pin to the grenade has been already pulled, i.e. our economy is already dead, yet we don’t realize it yet. The unemployment numbers are dismal, government stimulus via fiat/borrowed money is drying up fast and everyone and their dog is looking to get their “gibs” from the Federal Government, with the corporatocracy getting theirs first, as usual, and being the biggest drain.

However, a bigger problem looms ahead, beyond illusory individual stimulus measures, and we’re talking about the issue of inflation, plus, most importantly, the supply chain disruptions. Here’s how it goes: what are you going to do with your “free gibs” (government checks) if something like ninety percent of stores is shut down as being non-essential businesses, fifty percent of the items are also considered non-essential and/or restricted, and those that you’re “allowed” to buy are becoming increasingly more expensive?

We are not selling fear here, but if things don’t change dramatically, including our perception of the “pandemic”, supply chain breakdowns will go mainstream in 2-3 months tops. Big stores are already stretching their inventory to fill gaps in shelves; some of them are already limiting purchases to 1 per customer on a long list of items, but keep in mind: we’re not in crisis mode just yet. Another thing to contemplate is this: farms and big meat producers are having problems hiring workers to process produce and other goods. It’s true that due to lockdown, with restaurants and small businesses closing we ended up with an oversupply of goods, which caused a drop in food prices. This is going to end if nothing changes rapidly, as our supply will get destroyed due to a lack of production. Consumers are never going to profit medium-long term from economic collapse, even if uneducated economists push this fallacy originating from the depression era.

To give you an example, you may profit today from cheap gasoline prices caused by a crash in global energy demand, but this phenomenon is tied to a collapse in production which means less supply and higher prices long term. This cycle will continue until everything breaks and you will be reduced to 1 of 2 choices: self-sufficiency or poverty.

The supply chain collapsing is a hell of a thing, as globalism and so-called free trade created a very vulnerable and fragile system that is not capable of withstanding shocks. Highly optimized supply chains are incredibly fragile to external shocks like a global pandemic, and the fact that we import something like 80%+ of our medical supplies from China, which is currently designated public enemy number one, hardly helps. As we live in the industrialized comfort of our cities, we are unaware of the invisible supply chains that truck in daily various commodities, including fuel and food. Generally speaking, each city only has 3 days of fuel and food stocks, and the slightest disruption will deplete current stocks instantly. Also, the so-called governmental emergency services are quite limited and they’ll get overwhelmed quickly by a small number of injured/sick people, especially in densely populated urban areas. Cost-cutting policies stripped essential systems, including supply chains, of redundancies, hence any monkey-wrench thrown into this well-oiled mechanism has the potential to destroy the entire system.

It’s important to mention that the food industry in America is not in good shape, as there was trouble even before the crisis hit, due to its high volume/low-profit business model. Due to central bank policies from the past 20 years which created an economic model based on cheap money, the food industry is drowning in debt (an endemic problem in the US), and hyperinflation may become a very real possibility in the future years. This situation is not sustainable long-term, and we may be confronted with many food suppliers/producers going belly up; the disappearance of food providers will lead to further disruption of the supply chain, and those who will get hit the most will be small stores, i.e. those with the lowest volume and the highest overheads. Obviously, some areas will be hit harder than others.

Food panic…

When the supply chain breaks, especially when it comes to essential items like food, we’re confronted with a food panic. As panic sets in, due to erratic/insufficient shipments from suppliers, shoppers clean out the stores, and then, as stores fail to resupply on time, shoppers become unreasonably demanding, and that can be observed in inner-city situations even today when everything’s still working as it should. On a long enough time-line, fear-based full-scale self-perpetuating riots may become the new normal in cities like New York, Baltimore, Chicago, et al,  with the situation escalating fast.

Obviously, local and/or federal government will step in and start working with wholesalers, in order to make sure that enough food reaches the cities in time. However, this will not work, as suppliers and truckers will refuse, saying that they are not getting paid for the food they deliver in such a situation, not to mention the dangers of delivering essential supplies in riot-infested places. Homeland security and the National Guard may be deployed to pacify the situation and to deliver “free gibs” for the needy; another solution would be to nationalize food supply and to take over the delivery business.  This is not a long-term solution, and for history buffs, there’s nothing as dangerous and chaotic as famine, especially in a highly urbanized nation where self-sustaining families are virtually nonexistent.

This is yet another failing of centralization, which has caused many problems in the modern world, including our current pandemic. If you recall recent events, we refused to close our borders and continued schlepping people from Wuhan(!)-China via airplane even after Wuhan was quarantined by the Chinese authorities due to the SARS-Covid19 outbreak.  Supply chain disruption is currently a global issue, as the Baltic Dry Index essentially collapsed, signaling that global demand for goods is at historic lows. This was the first sign that we’re in big trouble, but the mainstream media only pays attention to the stock market, and never to the fundamentals. Even Apple, one of the world’s biggest corporations, announced that it abandoned its projections for the current year, and admitted that shutting down its Chinese factories “may be a problem”.

And if you think that iPhones are not essential items, guess what: if Apple is in trouble, and their production is in the toilet due to supply chain disruption, this means the global economy and many other companies are in the same situation. This is due to globalism, which created nation-states and interdependent economies that eliminated redundancies in production. We are all forced to rely on corporate “industrial parks” located half-way around the world for the vast majority of our products and goods. If the Chinese economy shuts down, the United States economy will lose something like twenty percent of its supply chain, with huge repercussions for US retailers, which make something like 70 percent of the US GDP. If the supply chain in Asia gets cut-off, the US economy will kick the bucket. Now, just think about the “war with China” mantra pushed in the media lately, whether we’re talking about an economic/commercial war or a “hot war”. The fall of Chinese dominos in a globalized world with China being America’s industrial park will knock out our dominos as well.

Here’s a very real possibility…

even if our economy remains unscathed by the SARS-Covid19 crisis, which is impossible but let’s play it like that for the sake of argument, the economic supply chain already suffered major setbacks. On top of that, the global economy was already in trouble and crashing (just like ours) due to historic levels of consumer/corporate debt, plus faltering freight and exports, so this Covid19 extravaganza may be the final straw that broke the camel’s back. Remember that we currently live in a massive Everything Bubble, created by more than a decade of inflationary FED stimulus; this bubble is prone to implode at any moment.

Even if the long-term situation may sound grim, because it is, there are ways to prepare for the new reality. As usual, stockpiling helps, but you never know how long a crisis is going to last. It would be wise to relocate to a rural community, near renewable/self-sustaining food sources. Also, having a well with an electric/manual pump is advisable.

Speaking of stockpiling, here are the emergency items that will disappear first in case of an emergency, so go get yours while they last, provided you have the money: water filters/purifiers, generators (high quality ones are expensive and gas storage is risky business), seasoned firewood, lamps/ wicks/ lamp oil, guns/ ammo, sugar/ honey, rice, beans, wheat, vegetable oil, lighter fluid, charcoal, vitamins/ supplements/ antibiotics/medical supplies generally, baby supplies, thermal underwear/ clothing, condensed/ powered milk, aluminum foil, toilet paper (not kidding), garden seeds, dog food, first aid kits, tuna fish/canned food generally speaking), batteries, salt, flour, yeast, spices, vinegar, baking supplies, matches, work boots, durable clothing, light sticks, flashlights, lanterns, cast iron cookware, fishing tools/ supplies, mosquito deterrents, garden supplies/ tools, duct tape, canned goods generally, bleach, sleeping bags, hand pumps & siphons for fuel and water, paper plates, rain gear, calorie dense foods like chocolate/cocoa, jerky, nuts, peanut butter etc., lumber, hardware like nails, nuts, screws etc., coffee, tea, cigarettes, hard liquors, and even livestock like chickens, goats etc.

I  hope the article helped. Read it carefully, prepare, stay safe, don’t watch the news and you’ll be okay.