If Everything Is Going To Be Just Fine, Why Do The Shortages Just Keep Getting Worse?

They keep telling us that economic conditions are improving, but if that is true why are the shortages worse than ever?  For a moment, I would like to take you all the way back to 2019.  Before the pandemic came along, we didn’t have any shortages.  If you wanted something, you just went to the store and got it or you ordered it online.  Prices were low, global supply chains were functioning smoothly, and to most people it seemed like it would stay that way for the foreseeable future.  But then the pandemic hit, and “panic buying” caused short-term shortages of certain items such as toilet paper and hand sanitizer.  It was understandable that people would want to hoard those things, because there was a lot of fear in the air.  But we also knew that those shortages were only going to be temporary.

Now here we are in 2021, and we were told that things would be getting back to normal by now.

But instead, there are severe shortages everywhere around us.

In fact, the shortages are far worse than anything that we experienced in 2020.

For example, did you know that dozens of important drugs are in short supply?  According to the official FDA website, there are shortages of more than 100 drugs in the United States right now

If you found yourself in a situation like this, you can check the FDA’s drug shortage tracking system.

Right now there are currently about 120 drugs listed as having a shortage.

On the website, if you type in a drug name in the database search field you can see if and why it’s in short supply. You can also see whether it is scheduled to be discontinued, and when the supply may start flowing again.

This wasn’t supposed to happen.

Shortages just continue to get worse for the home building industry as well

“Builders are delaying starting new construction because of the marked increase in costs for lumber and other inputs,” said Mike Fratantoni, senior vice president and chief economist with the Mortgage Bankers Association, in a report Tuesday.

He added that supply shortages for appliances are also putting a damper on new home building activity.

Just over our northern border, the shortages have gotten really severe.  In some cases, the construction of homes “is months behind schedule” because the shortages have gotten so bad…

Home builders across Canada are getting hit by a string of supply-chain disruptions, resulting in widespread product shortages and explosive costs for the industry.

In some cases, home construction is months behind schedule as developers struggle to source everything from lumber to PVC pipes, insulation to windows. Builders are also holding back on presales, unable to accurately price their homes too far in advance, given that material costs can fluctuate wildly on a daily basis.

When asked about these shortages, one home building executive said that “it’s getting worse and worse every day”

“The whole supply chain is out of whack,” said Matt McCurrach, president of Homex Development Corp. in Kamloops, B.C.

“It’s getting worse and worse every day,” added Sue Wastell, president of Wastell Homes in London, Ont. “Literally every day, we’re finding out something else is not arriving when it was scheduled to. … We’ve never seen anything like this.”

Of even greater concern is the global shortage of computer chips.  This is something that I discussed extensively in my recent article entitled “A Severe Computer Chip Shortage Will Last ‘A Few Years’, And This Could Plunge The Global Economy Into Utter Chaos”.  Just about every industry that you can name is extremely dependent on equipment that uses computer chips, and CNN is telling us that this shortage “is going from bad to worse”

The shortage is going from bad to worse, spreading from cars to consumer electronics. With the bulk of chip production concentrated in a handful of suppliers, analysts warn that the crunch is likely to last through 2021.

According to Goldman Sachs, 169 US industries embed semiconductors in their products. The bank is forecasting a 20% average shortfall of computer chips among affected industries, with some of the components used to make chips in short supply until at least this fall and possibly into 2022.

Actually, as I pointed out the other day, many executives now expect the computer chip shortage to extend into 2023.

For automakers, this is rapidly becoming a complete and total nightmare.  During the first quarter, global auto production was down by about 10 percent due to the chip shortage, but Ford has announced that production in the second quarter will be down by about 50 percent

Investors have heard plenty about the current state of capacity problems for months. Roughly 2 million cars—or about 10% of quarterly global automotive production—weren’t built in the first quarter because of no chips. Ford Motor (ticker: F), one of the auto makers feeling the shortage most acutely, said in late April that it expects to lose about 50% of planned second-quarter production.

A 50 percent decline in production?

That is nuts!

If automakers can’t make vehicles, then they will have to start laying off workers.

Unfortunately, that is precisely what just happened at one factory in northern Illinois

Some 1,600 jobs are being cut at a Jeep Cherokee factory in northern Illinois as automakers continue being plagued by the global shortage of semiconductors.

The U.S. arm of Stellantis, formerly known as Fiat Chrysler, said Friday it was cutting one of the two work shifts at its Belvidere Assembly Plant as of July 26. That could result in the layoffs of 1,641 workers, company spokeswoman Jodi Tinson said.

The economic optimists keep telling us that better days are right around the corner, but those better days never seem to materialize.

Instead, employment is still way below pre-pandemic levels, global supply chains are in a state of complete and utter chaos, and we are facing severe shortages of just about everything

Copper, iron ore and steel. Corn, coffee, wheat and soybeans. Lumber, semiconductors, plastic and cardboard for packaging. The world is seemingly low on all of it. “You name it, and we have a shortage on it,” Tom Linebarger, chairman and chief executive of engine and generator manufacturer Cummins Inc., said on a call this month. Clients are “trying to get everything they can because they see high demand,” Jennifer Rumsey, the Columbus, Indiana-based company’s president, said. “They think it’s going to extend into next year.”

The difference between the big crunch of 2021 and past supply disruptions is the sheer magnitude of it, and the fact that there is — as far as anyone can tell — no clear end in sight. Big or small, few businesses are spared. Europe’s largest fleet of trucks, Girteka Logistics, says there’s been a struggle to find enough capacity. Monster Beverage Corp. of Corona, California, is dealing with an aluminum can scarcity. Hong Kong’s MOMAX Technology Ltd. is delaying production of a new product because of a dearth of semiconductors.

If this is the “recovery”, what will things look like when the next severe economic downturn hits us?

In my entire lifetime, I have never seen such widespread shortages.

Those that are running things keep insisting that they have everything totally under control and that things will eventually get back to normal.

You can believe them if you want, but millions of others are preparing for a future in which their optimistic assessments of the future turn out to be very, very wrong.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on FacebookTwitter and Parler, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

A Severe Computer Chip Shortage Will Last “A Few Years”, And This Could Plunge The Global Economy Into Utter Chaos

Of all the shortages that we are currently facing, the global computer chip shortage may be the most serious.  That is because the chip shortage is expected to last “a few years”, and just about every sector of the world economy will be dramatically affected by this.  When people think of products that contain computer chips, they tend to think of electronic devices such as televisions, phones and laptops.  But computer chips are in thousands of other products as well.  They are in the vehicles that we drive, they are in the toys our children play with, and they are in the heavy machinery that farmers use to produce our food.  Without computer chips, our society as it is constituted today simply could not function, and so this is a really big deal.

Right now, global demand for computer chips is far outpacing global supply.  Some may assume that the answer is just to quickly build a bunch more factories and start pumping out more chips, but it isn’t that simple.

At this point, chips have become incredibly sophisticated, and manufacturing them can be extremely complicated

There are up to 1,400 steps in the overall manufacturing process for semiconductor wafers; it can take as long as 20 weeks to complete advanced chips, and fabs can use as many as 300 different types of materials throughout fabrication.

“It’s almost impossible to start chip manufacturing from scratch,” says Priestley. “This is why we are seeing industry consolidation: it has become so difficult and expensive to do, that companies just couldn’t afford to do it on their own.”

Over the decades, the percentage of chips made inside the United States has dwindled.  At one time 37 percent of all computer chips were made inside the United States, but now that number stands at just 12 percent.

Today, the vast majority of the computer chips that are used around the globe are made over in Asia

Specifically, companies have largely been outsourcing the manufacturing process to two companies – Samsung and TSMC. As a result, about three-quarters of the world’s total semiconductor manufacturing capacity comes from China, Japan, South Korea and Taiwan.

That makes us exceedingly dependent on chip production on the other side of the globe, and that isn’t going to change any time soon.

So for the foreseeable future, there is going to be a chip shortage, and the head of IBM is telling us that it could last “a few years”

The boss of the US tech giant IBM has said a computer chip shortage could last another two years.

Its President Jim Whitehurst told the BBC it could be “a few years” before the situation improves.

Other voices are issuing similar warnings.

For example, an industry insider quoted by CNBC believes that this crisis will persist “into 2023″…

Glenn O’Donnell, a vice president research director at advisory firm Forrester, believes the shortage could last until 2023.

“Because demand will remain high and supply will remain constrained, we expect this shortage to last through 2022 and into 2023,” he wrote in a blog.

This is very bad news for industries all over the world.

Apple needs chips to make iPhones, and it is being projected that Apple will lose billions of dollars in sales simply due to a lack of chips…

Speaking to analysts following Apple’s latest earnings report, the iPhone maker’s chief financial officer, Luca Maestri, predicted a loss of between $3bn and $4bn in sales in the current quarter due to limited supplies of certain chips.

The impact on the auto industry will be even more dramatic.

According to NBC News, auto industry revenues will be down 110 billion dollars in 2021 alone because of a lack of chips…

The auto industry will suffer a $110 billion hit to revenues this year due to the ongoing shortage of semiconductor chips, according to a new analysis from AlixPartners consulting firm. That is a steep increase from January estimates of $60 billion.

With no clear resolution in sight, the industry will likely produce about 3.9 million fewer vehicles than originally planned for all of 2021, the firm said. The chip shortages are not only curbing production of current models but may also force delays in the rollout of some 2022 products.

If you are planning to buy a new vehicle, I would do it soon, because shortages of certain vehicles are likely to start popping up around the country.

Personally, I am extremely concerned about the impact that this chip shortage will have on agricultural production.  Even though the western half of the country has been gripped by an endless “megadrought”, the chip shortage is being called the biggest problem that U.S. farmers are currently facing…

The biggest factor impacting the ability of U.S. farmers to produce the food we need has nothing to do with the weather, the markets, trade, regulations, or disease. The worldwide shortage of computer chips will impact all aspects of agriculture for the next two years and beyond. Almost every piece of farm equipment, like most everything else in our lives, needs a computer chips to operate.

The farm equipment industry has already been plunged into a state of great uncertainty because of a lack of chips.  From top to bottom, supply chains have been greatly disrupted, and this is causing massive headaches for U.S. farmers…

Meanwhile, farm equipment manufacturers have halted shipments to dealers because they don’t have the chips to put in the equipment. Reynolds Farm Equipment, one of Indiana’s largest John Deere dealers, says they are unsure about when thy will receive the new equipment that is on order. Bane Welker Equipment, which handles Case and several other brands at their dealerships in IN and OH, are urging customers to plan ahead. They indicated that not only have combine, planter, tillage, and tractor sales been impacted, but even ATV supplies are limited. Parts, even non-electric parts, are also in short supply because the manufacturers of those parts use the chips in the manufacturing process. As farmers integrate technology into all aspects of the farming process, these highly sophisticated semi-conductors have become the backbone of almost every farming operation.

Everyone agrees that this chip shortage will be with us for a long time to come.

But assuming that the world returns to “normal” after the pandemic and the global economy remains relatively stable, it is hoped that the chip shortage will end some time in 2023.

Unfortunately, those are not safe assumptions to make.

We live at a time when one crisis after another is erupting.  Just when you think that things have settled down a little bit, something else goes haywire.

Trying to accurately predict what conditions will be like for the chip industry in 2023 is a futile exercise, because nobody really knows how the world will have changed by then.

But what we do know is that we are facing a severe computer chip shortage right now, and everyone agrees that it definitely isn’t going away any time soon.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on FacebookTwitter and Parler, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.