The supply chain crisis could last a long time, and lead us into stagflation

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The difficulties in the global supply chain , such as the chip crisis but not only (have you tried to buy a bike or components in the last few months?) could continue for another one or two years , if not more, and to bring the markets into a situation of stagflation as happened in the 1970s; & egrave; the analysis of the famous and respected economist Mohamed El-Erian, published this morning in the Financial Times. The analysis focuses mostly on the US market, but the implications are evident for a while. all over the world – especially in the tech sector, for obvious reasons.

Stagflation is; a market condition where prices rise (inflation), but the economy is not really growing (stagnation). By struggling to find components and manufacture their own products, companies will be (in fact they are: the phenomenon has already begun) forced to increase prices , but not because & eacute; c & # 39; & egrave; too much demand – or at least not only: the problem is the forced closures of factories due to the coronavirus, congested ports, scarcity; of containers, soaring transport costs and the shortage of workers, who are learning to put their feet up for better wages. dignified.

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According to El-Erian, there are fewer and fewer managing directors who believe that component procurement problems are only a temporary phenomenon that will re-enter; within a few months. And the stagflation hypothesis becomes one of the cornerstones of planning strategies for future business strategies.

Unfortunately, according to the source, institutions and governments are not proving to be as fast

strong> to interpret the market signals and intervene to prevent this scenario from happening. It would be much more; simple and cheap than to activate when the damage is; now done.

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