Think about this for a second. The people running the global economy decided it would be a good idea to extend supply chains over multiple countries so that everyone does the thing they’re best at (what economists call “comparative advantage”). One country, for example, mines lithium, another combines it with nickel and cobalt and many other things from many other places to make batteries, and then ships those batteries to multiple other countries where they’re incorporated into cell phones and electric cars. Costs are low (if you ignore the slave labor), inventories are just-in-time, and consumers are ecstatic. And the people who own the mines and factories get rich beyond their wildest dreams.
But then the same people who devised the above system decide that it’s also a good idea to punish countries that stray from the imperial orthodoxy by cutting them out of the global trading/banking system. Apparently, it hasn’t dawned on the Davos crowd that the countries they’re randomly abusing are — by the globalists’ own design — part of multiple supply chains. Break one link and (surprise!) the whole chain fails.
A case in point is America’s decision to expand an anti-Russia military alliance to the latter’s border, apparently without regard for what the inevitable response would do to global supply chains.
So here we are, with the West punishing Russia by, among many other things, refusing to buy its oil — which earlier this week hit $130/bbl, with all the horrible side effects that that implies. More obscure but nearly as serious, Russia is a key supplier of argon gas which (who knew?) is crucial to the manufacture of microchips. Since the global auto industry is already hamstrung by a chip shortage, compounding this problem will make a bad situation even worse.
Then there are the direct effects of a totally avoidable war. From today’s Wall Street Journal:
Hundreds of Ships Trapped by Ukraine War, Endangering Sailors and Global Supply Chain
The crew on a Bangladeshi cargo ship stranded near the Ukrainian port of Olvia heard an explosion, then the bridge was engulfed in flames.
A missile struck the MV Banglar Samriddhi at 5:25 p.m. last Wednesday, killing one crew member and leaving several others with serious burns, according to Bangladeshi crew members, their families and Ukrainian authorities. It was the fifth merchant ship to be hit by artillery off Ukraine’s coast since Russia invaded.
The war in Ukraine has severely hobbled shipping in the Black Sea, with broad consequences for international transport and global supply chains. Dozens of cargo ships are stranded at the Ukrainian port of Mykolaiv, shipping trackers said. An estimated 3,500 sailors have been stuck on some 200 ships at Ukrainian ports, according to London-based shipping tracker Windward Ltd. More ships are stranded around the globe than at any point since World War II, maritime historians said.
The result is a shutdown of the world’s second-largest grain exporting region. Ukraine accounts for 16% of global corn exports, and together with Russia, 30% of wheat exports. Global wheat prices have jumped more than 55% since the week before the invasion.
“This shock to global grain supply is the biggest supply shock since the OPEC oil cuts in the 1970s,” said Salvatore Mercogliano, a professor at Campbell University in North Carolina and former merchant mariner. “It will mean food shortages in the Middle East and Africa, and inflation across the world.”
Making matters worse for global shippers, thousands of Ukrainian and Russian seafarers are stuck in ports around the world, leaving shipowners scrambling to find replacement crews to keep strained supply chains rolling.
In the Black Sea and the adjoining Sea of Azov, which are important food and oil export routes, five tankers and cargo ships have been struck by missiles, according to Ukrainian port authorities. The stricken vessels include tankers, container ships and bulk carriers from Japan, Turkey, Moldova and Estonia, ferrying cargoes including diesel, clay, and grain.
Read the rest of the article here.
The upshot? The Russia/Ukraine war could end tomorrow, but the damage done to the globalist worldview will be permanent. Its inherent contradictions — and its proponents’ stupidity — have been laid bare, and going back to the status quo ante will be virtually impossible.