By Alec Hogg
Some really important news in the latest Global Supply Chain Pressure Index compiled by the Federal Reserve Bank of New York. Inflationary blockages in global trade, with us since Feb 2020 through Covid lockdowns, are now out of the system. As the graph below shows, international trade is flowing smoothly again.
That has major implications for investors, and for ‘open’ economies like South Africa’s where imports and exports account for over half the country’s business activity.
First, price pressures stemming from these disruptions have significantly eased, so it won’t be long before the impact is reflected in lower inflation (and interest rates). Second, smoother supply chains explains recent declines in commodity prices – buyers are now eating into stockpiles knowing replacements are easily sourced.
And third, China is very much back in the game after throwing open its economy depite Covid scaremongers. Well funded vaccine lobbyists and their useful idiot vessels loudly proclaimed that this would decimate China’s mostly unvaccinated populace. It did not. Lesson learned, one hopes.
Read more: From the FT: Ramaphosa’s new electricity minister gets muted applause
More for you to ready today:
- Statement by SA President Cyril Ramaphosa on the changes he made to the National Cabinet. Click here.
- Jerome Powell says Fed is prepared to speed up interest rate rises. US stocks fall on his comments. Click here.
- Alarm bells for Prosus/Naspers. Emerging Market investing guru Mark Mobius says he cannot get his money out of China. Click here.
- Why Scientists Got the Covid Lab Leak Wrong. We’re only human, and we’re as susceptible as everybody else to cognitive biases and self-interest. Click here.
- Indonesia is into full scale resource nationalism, planning to ban the export of valuable commodities including bauxite, copper, tin and gold. Click here.
