/View.info/ What is happening with real inflation around the world is unprecedented. The rise in prices is so rapid and large-scale that it threatens the entire world economy. If we remember, half a year ago we were all moving towards deflation. After Japan’s economy, which was a guiding star for the rest. This systematic reduction of inflation in recent decades. In Japan, everything turned into deflation and stagnation of economic growth, from the glut of consumer demand.
Now practically all world prices are jumping at a tremendous speed.
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Building materials. The stock market price of wood in the United States approached $700 per cubic meter. Here is the price chart for 1000 board feet (analogous to the Russian cube).
The chart does not reflect the latest increase to $1,640. Price is for 1000 board feet. U.S. lumber has grown 4-5 times the average price for the past decade.
Rapid growth by 30-100%.
I think everyone has known about metals for a long time. The world price has doubled. And this is one of the foundations of construction.
In Russia, the value of the chipboard plate has jumped 2.5 times. Now the factory price for a sheet of 9 mm by 1.25 by 2.5 meters is more than 1150-1250 rubles per sheet. It was under 450 rubles a year or two ago.
2. In April, staple foods rose by 1.7%. Compared to April last year, the growth was 30.8%. The price of corn is actively growing
The growth is more than double.
3. Raw goods. The growth of two or three times for practically all metals and iron ore. For a year. And palladium has skyrocketed.
Copper jumps to $2,000 and analysts are sweating.
All plastics have jumped very strongly. Frost in Texas worsened the situation in March, when the equipment of a cluster for the production of various PVCs suffered.
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A sharp rise in transport costs. The Baltic Dry Freight Value Index, which tracks the cost of sea freight for bulk cargo around the world, rose to an 11-year high. The value of the indicator on Wednesday reached 3157 points, increasing over the last month by more than 50%.
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US real estate prices. According to the association, the median price of the sale of finished homes at the beginning of April reached 329.1 thousand dollars, which is an absolute historical record. On an annual basis, houses have increased in price by 17.2%. In the conditions of the pandemic, the demand for real estate has risen sharply. Americans are moving away from big, overcrowded cities. Growth is particularly strong in the northeastern states. Hence the sharp increase in the demand for building materials.
These are the main points. Why so
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Inflow of money from central banks around the world. Huge budget deficits in the largest developed countries of the West. In the US, budget spending last year exceeded income twice! The volumes are unprecedented. Historical
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Production fell, it cannot keep up with such a volume of new money.
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The service sector simply collapsed, further exacerbating the sterilization of the excess money supply.
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It’s time for a maker’s and seller’s market. Pure and simple laws of economics. Demand exceeds supply. The price is skyrocketing. It used to be a buyer’s market and there was a crisis of overproduction for many years.
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The population of developed countries has saved huge sums during the pandemic. Thus, during the pandemic, the residents of Great Britain have accumulated about 200 billion pounds in the banks. This table is either going to market or it may be poured in the near future. Because the fear of rising prices will force them to spend their savings.
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Cutting key Central Bank interest rates around the world during a pandemic. Thus, a year ago, the US Federal Reserve made the sharpest rapid reduction in interest rates in history.
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In 2020, there was a disparity. Consumption by the state, companies and the population of the West increased. This can be seen in the retail sales of the same. And production at the same time fell sharply. There was a shortage of goods.
The madness continues. Western countries stopped the economic lockdown by printing unbacked money, just flooding in. But talk of rising prices among economic analysts is just beginning. And it might be too late…
Developed countries are not ready for a sharp rise in inflation. Raising interest rates to cool the surge in demand will crash markets and multiply the cost of servicing debt. Chain reactions can start with unpredictable results.
Translation: V. Sergeev
#Global #Inflation #Tsunami #GRAPHICS
