The “surge in demand” is congesting the global container ports. That is, it’s a primarily (though not all, and getting less so by the day, at the micro level) an excess demand issue creating the shortage economy.
Some $10.4trn of global stimulus has unleashed a furious but lopsided rebound in which consumers are spending more on goods than normal, stretching global supply chains that have been starved of investment. Demand for electronic goods has boomed during the pandemic but a shortage of the microchips inside them has struck industrial production in some exporting economies, such as Taiwan.
...The risk now is that strains in the economy lead to a repudiation of decarbonisation and globalisation, with devastating long-term consequences. That is the real threat posed by the shortage economy. – Economist, Oct 9
American consumers are going to get a sense of what life is like in a more closed economy, one with heavy trade restrictions, this Christmas with empty shelves and big price spikes. We are not optimistic they will be able to make the right connection and proper extrapolations but we do hope we are wrong.
We are not even confident the policy makers clearly understand what’s driving the global economy. They are conducting an experiment that has never been tried in all of history. And the stock market is valued at 200 percent of GDP!
As they say in the supply chain, “it’s all downstream from here.”
Global Macro Monitor 