There are two types of inflation happening now. One which the fed by raising interest rates and QT is hoping to curb it by reducing demand.
The second type of inflation is degloblisation. It started when US and China get into trade war and especially when US starts to target specific Chinese industries and companies. (There are signs that US might want to end the tariff war with China to slow down inflation but there is some political consideration especially with mid term election soon).
But nevertheless the degloblisation is the trend now as we can see Chinese companies forced to delist from the US market. The Ukraine conflict also adds to the degloblisation as Russia are further push out of the 'global' economy.
What is the consequence of this degloblisation.....one of the consequence is higher cost(inflation) and also higher probability of conflicts.
Higher cost is that factories and plants are no longer set up in places where one can achieve lowest cost of production. For example semiconductor plants, if it is made in US, then the cost of the semiconductor is much higher than made in Taiwan and this higher cost will then feed to other industries that use it....like cars, electronic products and etc etc...
We probably will have to get use to higher cost of living now compared to the past 30 years. And to add with the conflict in Ukraine, there is a shortage of fertilizers that might lead to reduce food production in the 2nd half of the year.
We probably will see much higher food costs in the 2nd half and the higher food costs will also lead to higher cost in many other industries like for example workers will want higher wages.
Life will be hard for many especially salaried low wage workers and I can empathize with them... And we will see a lot of unstable governments and countries as inflation continues to surge.
For those who have a lot of cash waiting to deploy ...sit tight the main dishes is yet to serve ....what you are seeing is just peanuts and tea which one is serve in the restaurant before the main dishes are ready.
台積電赴奧勒岡設晶圓廠 美國做半導體比台灣貴50%! 成本.人才挑戰重重 張忠謀直言: 超浪費 陸行之:政府補助是關鍵│記者 劉馥慈 孟國華│【台灣要聞】20220422│三立iNEWS
https://m.youtube.com/watch?v=ZsPRAj905j8&t=12s
