We are now seeing what we talked about for the last year. How did we know what was going to unfold?
In this video we cover how the world's largest economy is overflowing with products. The entire supply chain is backlogged with inventory. This means that prices of these goods is going to drop like a rock. Of course, this will reverse at some time since the manufacturing sector is shutting down.
▶️ 3Speak
It was to be expected that with inventories full of products, their prices will have to drop at some point.
That is how things usually work. Of course, people will focus upon what is still elevated completely overlooking all the products that drop like a rock.
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BEER.When supply is greater then demand price of produce will eventually drop,but with time it will come back.
Summary:
In this video, Taskmaster discusses the Bullwick whip effect and its impact on prices. He explains how oversupply in the market due to allocation issues will eventually result in a collapse of prices. Taskmaster elaborates on the current situation in the United States where there is an excess of inventory, leading to discounts and potential layoffs in the manufacturing sector. He warns about the ripple effect of this oversupply, emphasizing that it will lead to a scarcity of products in the future, causing prices to soar. Taskmaster concludes by highlighting the potential economic implications of these fluctuations.
Detailed Analysis:
Taskmaster starts by introducing the topic of the Bullwick whip effect and its relationship with prices, highlighting how oversights in supply chain sectors contribute to market dynamics. He references information from the Richmond Fed and mentions retail supply chain issues at big companies like The Gap, Walmart, and Target, leading to excess inventory across different levels of the supply chain. The inefficiencies in inventory allocation are discussed, emphasizing the distorted vision of demand it creates.
He provides a detailed example of how allocation issues lead to fluctuations in ordering and production levels, resulting in a surplus of goods. Taskmaster points out the current situation in the United States where warehouses are full, retailers have excess stock, and there is a struggle to process cargo due to lack of storage space. This oversupply scenario is projected to lead to collapsing prices, with some products like TVs already seeing heavy discounts.
The discussion shifts to China and the impact of manufacturing cutbacks, potentially leading to layoffs and future disruptions in the supply chain. Taskmaster explains how these fluctuations from oversupply to scarcity will result in price volatility. He cautions about the economic repercussions of this cycle, including job losses and business closures.
Taskmaster underlines the importance of forward-looking indicators over trailing indicators like inflation in understanding market trends. He highlights the potential collapse in prices due to oversupply, particularly in non-energy and non-food sectors. The video concludes with Taskmaster emphasizing the impending collapse in various product prices, while recognizing the continued high demand for energy and food-related goods.
In summary, Taskmaster's analysis delves into the intricacies of supply chain dynamics, allocation issues, oversupply, price collapses, and the potential economic impacts of these phenomena on businesses and the job market. His insights provide a comprehensive outlook on market trends and the interconnected nature of global supply chains, emphasizing the importance of understanding these dynamics for making informed economic predictions.