If We Are Experiencing Severe Shortages Now, How Bad Will Things Get When The Economy Starts Tanking Again?

Inflation and shortages are the two big stories for the U.S. economy this week. In recent days I have done multiple articles about inflation, and so today I want to focus on the widespread shortages that we are currently witnessing. At this moment, the U.S. economy is experiencing more shortages than it did at any point during 2020. I know that statement sounds quite outlandish, but it is true. During the early stages of the pandemic, there were temporary shortages of toilet paper, hand sanitizer and other items, but now there are severe shortages throughout many sectors of the economy, and quite a few of those shortages will not be so temporary.

On Thursday, Business Insider published a list of some of the most serious shortages that we are going through at the moment…

-Computer chips
-Used cars and rental cars
-Plastics and palm oil
-Truckers and rideshare drivers
-Homes and vacation houses
-Household products like toilet paper and tampons
-Bacon and hot dogs
-Imported foods like cheese, coffee, and olive oil

That is quite a list!

The COVID pandemic suppressed output for many industries for an extended period of time, and meanwhile our “leaders” have been pumping trillions and trillions of fresh dollars into the system.

So now we have way too many dollars chasing way too few goods and services, and this is causing tremendous inflation and very painful shortages.

Just look at what is happening to the steel industry. Changes in supply and demand have pushed up the price of steel to “nearly triple the 20-year average”

After bottoming out around $460 last year, US benchmark hot-rolled coil steel prices are now sitting at around $1,500 a ton, a record high that is nearly triple the 20-year average.

Steel stocks are on fire. US Steel (X), which crashed to a record low last March amid bankruptcy fears, has skyrocketed 200% in just 12 months. Nucor (NUE) has spiked 76% this year alone.

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