Interest rates are rising as a lagging protection against money supply and fiscal excesses in Western nations [see photo]. Add to those forces a hot war in Ukraine and the potential for more hot spots around the globe. The war in Ukraine has increased the food shortage issues that are impacting our world. The sources of finance for this war on both sides [Russia and Ukraine] come from the sale of oil and gas [Russia] and fiscal spending at the expense of taxpayers in EU, America, Britain, etc. We live the classic tale of a tiger chasing its own tail.
The cycle of rising debt in the West is inexplicably linked to the slam-dunk loss of cheap food due to loss of production, high cost of transporting food, the Covid shutdowns in national economies, and the broken global supply chain. Rising national debt has been tolerated for the past decade because interest rates were set at zero [or below] but today that is no longer the case. Global interest rates are rising and this spells trouble for those who have enjoyed a free ride on their ever increasing debt burden.
The global shortage of food is rising but the protests are not yet focussed on this issue; instead, protesters are chanting mantras that highlight their concerns about Climate Change. Expect those protesters to lose their voice as food shortages hit the poor and middle class around the globe from Africa to South America to Europe and onto the USA. Food-shortage rioters will be desperate because their families are facing a level of human deprivation that has not been seen for decades past.
What does this mean for YOU? Perhaps nothing. More likely... it means that you must first consolidate your debts. Second you must reduce that debt pile. Third you must change the way you purchase and consume staples such as foodstuffs. Fourth you must embrace the economic principle of "substitution" which will see you choose high-quality [but relatively low-cost] alternatives to what you ate and relied upon yesterday.
Richard.
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