Is anyone else wondering what effect the ‘lockdown’ will have on food production and distribution.
It is a fragile and time sensitive system. Crops need to be harvested and moved to market on a steady basis. Warehouses need to rotate stock on a constant basis, to keep it fresh and available.
Consider a major warehouse distribution center, a HUGE place that moves massive amount of produce, meats, dairy, seafood and so on. It is all perishable and needs to be rotated fast. Think of all the produce needed to supply restaurants and major grocery chains in a city. It comes and goes through only a few major hubs.
Now, think of the supply chain that gets it all there. From farm to market so to speak, only in massive quantities. When one part of the system slows down, it has to back-up another part of it. Food stuffs accumulate and expire all along the chain.
It will find an equilibrium, eventually, as it did when building up. But, it is going to take time for that chain to build back up to the amounts it was at before the lock down. Is this all because of a virus with a mortality rate of less than .10%?
Things are not adding up. They are dumping milk as well; it is claimed because restaurants,, institutions and schools aren’t buying, but they are limiting how much you can buy at the store. Shortages are being created by someone and for some reason and they may succeed in making them real, fatally real.
These are the issues that will come to a head some months down the road. Nobody really thinks of the logistical chain, or the steps in the process. We only think of truckers and distribution most of the time.
What if workers are sick and can’t get into the field to harvest, or aren’t allowed to harvest, sick or well? There won’t be anything to ship. If farmers can’t get into the field to plant there won’t even be anything to harvest. If cattle, hogs and poultry have been destroyed there won’t be anything to process.
As many who follow this blog already know, the virus was the catalyst and not the cause.
When the repo markets started blowing out last September the timer on the bomb started ticking down. The whole world economy was going to come apart at the seams anyway and the elites, (call them The Powers That Be, The Shadow Government or the Deep State), needed a scapegoat to blame and now there is one.
The Fed has already dumped more liquidity into this then they did back in 2008 and it‘s hardly having any effect at all. Unfortunately we are not going back to what was considered as normal before this started. We have to go down this road now which is starting as deflation and goes into a hyperinflationary depression.
We are still on the deflation side of the equation. Sooner or later they will have to go beyond the $1200 stimulus checks and start a universal basic income or direct helicopter money dumps.
From the perspective of economic theory and practice, government spending during World War II demonstrated how massive government spending at a time of severe economic downturn and dislocation can indeed get an economy humming again.
During WW II Government spent money on aircraft, ships, landing-craft, weapons, tanks, trucks, jeeps, food for millions of soldiers, supplies, and so forth. Government spending not only skyrocketed to over 40% of GDP during the war, but it was accompanied by a command and control economy, with Government agencies directing what was to be produced, Soviet style.
When the stock market crashed in 1929, the Dow plummeted from its September peak of 381.17 to a low of 41.22 in July 1932. Unemployment increased, to a peak of about 25 percent in early 1933. Gross domestic product fell steadily, ultimately declining by about 30 percent.
The economic crash caused by the coronavirus, if anything, will be sharper and steeper. If it was the plan of the Deep State to set out to deliberately destroy an economy, requesting most people to stay home has been a very effective way.
Fear of the virus is disrupting production, and the “public health” response to the virus is economically catastrophic. Given the scale and rate of likely economic collapse, we could easily see G.D.P. decline by Great Depression levels, and at a much more rapid rate than in the early 1930s.
It took WW II to stimulate us out of the last depression. I am seeing some very troubling parallels here.