-
Sri Lanka banned fertilizers start of last year. Farmers interviewed this year said yields fell to 1/6th, i.e ~84% loss. They suddenly had to feed the whole country on imports, spent all their Dollar reserves on food. No Dollars left to import oil, medicine. They hid this from the public till the collapse this month.
-
Tajikstan govt told citizens last week to stock up 2 yr food supply... I can see a theme here.
-
I read about Peru Covid response start of last year. It wasn't special, similar to other 3rd world. No money, few hospitals, weak enforcement. Poor people kept working to avoid starvation. I haven't dug in detail what they did last 2 years, so I won't comment about the cause of inflation.
Comment on Peru is 3rd country to be Great Resetted, after Sri Lanka, Tajikstan, in past week
sj_zero@lotide.fbxl.net 3 years ago
This is the natural result of COVID policies. Don't forget that. Peru won't be the last.
Policies that pretend nobody will have to do anything are the best at making everyone destitute.
iamtanmay@wolfballs.com 3 years ago
sj_zero@lotide.fbxl.net 3 years ago
In my view, shortages of this kinds are sort of a global problem and economies like this are just the ones that got hit.
It's like... Let's say that you had a cast iron part, and a little piece of it fails. You are a master welder, so you repair the part without the issues of welding to cast iron and strengthen that piece. It's possible that after that the thing never fails again, but in reality that was just the weakest part. Once that part can no longer fail, the next weakest part in the chain will fail. If you have a fundamental root cause that you are ignoring and you're just chasing around the last piece to break, then all kinds of parts are going to break before you finally toughen everything up enough that it doesn't break again.
In the same way, the first world completely stopped all production for an extended period of time. A lot of metals and mining, a lot of farming, a lot of production turning raw materials into finished products, all of that was stopped. At the same time, those rich countries ended up pretending that there was still money, and absolutely flooding the market with money. This does have the effect of inflating the local currency, but it also means that until that inflation hits you have the rich world's spending power chasing after all of the remaining productivity. You've basically got this vacuum cleaner, sucking up anything that's on the market and driving up prices even in currencies other than the ones involved.
It isn't an entirely zero sum game. Some companies are going to collapse because of what's going on, and others are going to do very well. In the 1920s, Europe was absolutely decimated by the first world war, and that's at the stage four an unprecedented boom in the United States because suddenly exports from that country became very plentiful and very expensive. Something similar happened after world war II. Unfortunately, I don't think that given the trillions of dollars in debt that they took out that the US has a similar boom after covid. I expect that just to keep the plane alift, they're going to end up having to go back to policies like Paul Volcker. The last time that they did that, it caused the greatest recession since the Great depression, and neither the government nor the people had a fraction of the debt that they have today.
iamtanmay@wolfballs.com 3 years ago
Yes, you are right. I pointed this out in January. Ammonia shut down happened in countries that do not produce natural gas. Supply chain simplified:
Natural gas from Russia -> China/EU Ammonia factories -> Food exporters -> Food importers
Natural gas prices went up last year -> China/EU stopped selling Ammonia -> Food importers are fucked
iamtanmay@wolfballs.com 3 years ago
Quick update on Peru: "...demonstrations by farmers and truckers intensified over soaring food, fuel, and fertilizer prices". Even if we blame fuel price on Russian war, food/fertilizer prices don't jump overnight. Harvests take months and fertilizers were a problem since Nov 2021.
I posted in January showing predictions about fertilizer (prices 4x if available at all). Bottleneck was high natural gas prices shutting ammonia production. Non-ammonia fertilizers are fine, but cannot be substituted.
Food prices have/will spike. More countries about to collapse - John Kerry's statement about 100 Million starving refugees coming to fruit.