by Daisy Luther, The Organic Prepper:
Global trade has been the engine of the world economy for decades, connecting countries and cultures through exchanging goods and services. However, this highly interconnected system is also vulnerable to disruptions that can have significant global consequences. A disruption of international trade, whether caused by geopolitical conflicts, pandemics, natural disasters, or changes in trade policies, can (and will) trigger a cascade of effects that impact multiple dimensions of economic and social life.
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Sadly, I must say, this is the most immediate threat I can see on our horizon. Both in Venezuela (for obvious reasons) and the rest of the world.
I believe the complexity of the whole scenario is way too long for such limited space.
However, I believe that something will happen in the near future after analyzing the movements in the Asian and Middle Eastern chessboards and the events in our own yards.
Hence, let’s focus on the preparation and mitigation process.
The most immediate consequences that come to mind are:
Economic Consequences
- Increased inflation: Shortages of goods and services caused by trade disruptions can create inflationary pressure as consumers compete for limited products. This is the most harmful effect. We experience hyperinflation, and although it’s not like the USD is going to collapse (not too soon, at least), the consequences were enough to make me fly away. The manageable aspect of all this disaster is that the only thing losing value is usually the national currency. The fiat money. The paper and the electronic “backup”. This being said the best value storage happens to be the goods, and (for those in the business) some precious metals (and PLEASE don’t mention lead and copper – that is ancient history. If there is a national-wide/worldwide conflict, and martial law is issued, the minute someone finds out you have 40 or 50K of rounds somewhere, you’re history too). Any military in any part of the world would be panicked, knowing that civilians can stand their ground and shoot back with everything they have. You know already how I know this first hand, right?. Then, you need spare parts for your household, vehicles, consumables to keep your business running, etc. That’s where the real value is. We are experiencing a rise in the prices in USD, which is unbelievable in the first place. There is no reason for prices to go up other than that the mafia wants to start draining the currency out of the laundry machine. This means they will unchain chaos, launch a power blackout, and run to their planes in “secret” airstrips outside Venezuelan islands in Coche or Cubagua to head somewhere with the transponders off.
- Decreased economic growth: International trade is a key driver of global economic growth. A sudden disruption in trade will unleash a widespread economic slowdown as businesses lose access to inputs and markets, reducing production and employment. The consequences of this in the medium to long term are the ones I’m living: no jobs for qualified people because most of the industry is kaput. All the formerly vibrant industrial job markets where even a newbie could get a decent, underpaid-but-enough-to-live-job are now gone for good.
- Financial market volatility: Uncertainties related to global trade can lead to increased volatility in financial markets, affecting investments and the value of currencies. Those with their money invested should have a couple of backup plans. This, among other effects, affects banking services and neutralizes the capabilities of getting loans, for instance.
- Deindustrialization in some countries: Countries highly dependent on exports may experience accelerated deindustrialization as they lose their traditional markets. As a matter of fact, this is already happening in more areas than we are aware of.
- Increased inequality: Trade disruptions can exacerbate existing inequalities, as poorer and less diversified countries are more vulnerable to external shocks. This can (as it already happened) bring along politicians trying to use nationalism and set on fire the relationships with other countries to avoid turmoil and unrest within their borders…With all the logical consequences for the most vulnerable civilian population.
Social Consequences
- Product shortages: Consumers may face shortages of basic goods, especially those imported from countries affected by trade disruptions. We saw it happening and suffered this in Venezuela as well. The black market generated was designed structurally to provide an illegal flow of money to the hands of those controlling it: the NG. This is still happening with the gasoline. They need to keep well-stocked up the jungle labs in Colombia and the illegal mining operations in El Callao, where they are extracting the gold to send it to their cronies: Iran, Turkey, China, and Russia.
- Meanwhile, they control the Dust Routes to keep pumping the dust into the nostrils of the addicts worldwide and especially the US society…but that is a different facet of the problem. Do you remember when they used to say that the white dust (cocaine) was “the poor man’s atomic bomb”? Well, we’re all living through the fallout now.
- Increased unemployment: Decreased production and business closures can lead to a significant increase in unemployment, which can lead to social unrest. This means unhappy, underpaid people without expectations of getting “out of the rat race”. Let’s face it: that is what the leadership in many countries craves. No matter whether this leads to vice or crime, That is manageable with repressive measures and doesn’t affect them.
- Decreased standard of living: Shortages of goods and services, rising prices, and job losses lead to a general decline in the standard of living. This is related to the previous point: being underemployed means that your standard of living is not the same as you once had.
- Geopolitical tensions: Trade disruptions can exacerbate existing geopolitical tensions and lead to new conflicts. This is probably one of the most serious consequences. Some kind of attack would very probably cause any serious interruption; this would lead to a conflict that could escalate to levels that nobody could ever predict.
Environmental Consequences
- Environmental degradation: The search for new sources of supply can lead to increased exploitation of natural resources and environmental degradation. This could affect our surroundings in unpredictable ways. Imagine that if, for some reason, 18-wheel truck tires stop arriving and beef (among other items) goes in short supply. Every Joe Sixpack in the cities with a hunting rifle and a license will jump on their trucks and head for the hills with their well-stocked coolers and beverages in the back. Very likely, with a wife and kids back home, they will try to stretch the boundaries. We know already enough to avoid dismissing what people with an empty plate on the table can do when under serious stress.
On the other hand, the oil grab that these thugs have been doing generated extremely serious damage because of oil spills on our shores.
Historical and Current Examples
Throughout history, trade disruptions have had a profound impact on the global economy. The Great Depression of the 1930s, partially caused by trade protectionism, is a classic example. More recently, the COVID-19 pandemic has revealed the fragility of global supply chains and underscored the importance of international trade to the world economy.
We are not ready for yet another serious disruption. Especially not for one with an unknown duration.
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