The narratives I’ve heard about the shortages say they are driven by:
- Lockdowns (now only in China)
- People taking time off sick post lockdown, exaggerated by isolation requirements
- Some people banned from working due to vaccine mandates
- Limited immigration (not enough low paid workers to get low skills but essential jobs done)
- Spending during the pandemic was postponed and then everyone wanted to catch up at the same time
- All of which resulted in pressure on logistics networks
- which in turn resulted in pressure on oil prices.
- High oil prices are also fed by the ESG “movement” which has caused a lack of investment in oil production. (e.g. yesterday: https://www.theepochtimes.com/gulf-state-opec-members-sound-alarm-about-dwindling-global-energy-capacity_4457261.html)
- …and there has been no obvious effort to increase the rate at which utility scale renewables are built.
- the elites have never seemed so out of touch…people who get all their cues from their rich mates keep sounding like idiots rather than visionaries (ESG, CRT, BLM, etc). They can’t be getting the best out of people….this means lower productivity, people leaving the workforce as early as they can, etc.
Shortages then lead to price rises (inflation), which has also been fed by excessive government spending and central bank easing.
Some factors are short term (1-7), some are long term (8-10).
For mine, number 10 is the biggest worry because important decisions aren’t getting done while trivialities are getting more attention than they deserve.
I think (based on zero quantitative research) that the short term factors will have mostly faded by year end. The long term factors have been in play for a while. The ESG one is the scariest because oil investment has been too low for several years. Even if ESG stops being a thing in corporate boardrooms, renewed money flows will take time to have an impact.
Comparing the short term factors weights with the long, my hunch is that as the short term stuff expires, the economic data will begin to look better only to fall again when oil doesn’t get cheaper fast enough.