A few months ago, amid all of the headline warnings about inflation and prices of essential products, CTH noted that if we were to continue waiting about six months, we would see a massive backlog of unsold goods and as a consequence the prices of non-essential durable goods would begin a rapid decline. That exact scenario is about to unfold.
Keep in mind, this is not necessarily a collapse of total global economic activity; what we are seeing is a collapse of western nation economic activity that is impacting the rest of the world. A great economic fracturing is taking place as the western nations intentionally shrink their economy. The supplier nations are feeling the consequences.
Maersk is the international shipping company that delivers millions of containers of goods all around the world, mostly by ship. They are warning that warehouses are full of previously delivered goods, unsold consumer durable goods, as retail sales have come to a standstill.
The amount of inventory in warehousing is so extreme, major wholesale and retail groups have run out of storage space (link).
COPENHAGEN, Aug 3 (Reuters) – Shipping group Maersk (MAERSKb.CO) expects global container demand to fall this year as sales of durable goods come to a “standstill”, leaving flat-screen TVs and furniture piling up in warehouses, the company said on Wednesday.
A surge in consumer demand and pandemic-related logjams holding up containers in key ports had boosted freight rates and profits in the shipping industry in recent quarters, yet the cost-of-living crisis has reversed that trend.
[…] “Sales of durable consumer goods have come to a standstill,” Chief Executive Soren Skou told journalists at the company’s headquarter in Copenhagen. “Consumers have bought what they need for now of new sofas, kitchens, flat screens and garden furniture.”
In the United States, the country’s largest warehouse market is already full as major U.S. retailers warn of slowing sales of the clothing, electronics, furniture and other goods.
Mearsk said the number of containers it had loaded on to ships fell by 7.4% in the second quarter compared with a year earlier. (read more)
Keep in mind, South Korean factory output is now negative (electronics etc). European factory output is now negative (industrial equipment). Japanese factory output has dropped dramatically, and U.S. factory output has stalled. All of these issues overlay the statements by Maersk that shipping is not needed.
The western economies are contracting in response to the collective energy policies of the Build Back Better climate change agenda, and the high cost of energy that comes from stopping energy production.
Energy production in western nations has been slowed or stopped (Build Back Better). Western nation inflation is being driven by higher energy costs as a result of less energy products being produced, oil, coal, gas. Western banking groups have raised interest rates to slow down the economic engines to meet the drop in energy production.
All of this is being done with intent, purpose and control. This is a managed decline.
