The Red Sea, Shipping Containers, and Inflation
2185 sats \ 8 comments \ @kr 15 Dec 2023 econ
Recently I read “The Box” and had the author Marc Levinson on my podcast to discuss the importance of container shipping in enabling global trade and slashing shipping costs.
Today I’m hearing some concerning developments in the Red Sea with Maersk apparently pausing all voyages through the Suez canal and Hapag-Lloyd doing the same until Monday after ships were hit with missiles yesterday.
Given the importance of the Suez canal as a trade route between Europe and Asia, I wonder if pausing shipments will cause any material follow-on inflation.
I don’t have any inside info here, but it struck me today as something worth keeping a closes eye on, especially if attacks on ships escalate or if these pauses are extended.
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331 sats \ 0 replies \ @benthecarman 15 Dec 2023
"when goods don’t cross borders, soldiers will"
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543 sats \ 4 replies \ @davidw 15 Dec 2023
Think you could be right, more goods inflation will happen but probably not right away. I’m sure there’ll be other effects that come into play in coming months, to create yet another ‘perfect storm’. Everything seemed to land around a similar time in 2020.
Interesting that people think rates are going near zero again, and are bullish risk for that fact. I don’t particularly like the comparison with 70s, but this chart posted by someone on Twitter attracted my attention yesterday. Wish I could remember who posted it.
Edit: found it, here’s the link
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60 sats \ 2 replies \ @kr OP 15 Dec 2023
wow, this chart is amazing
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99 sats \ 1 reply \ @davidw 15 Dec 2023
Sure is.
If true, it tells us that October 2024 after the election, everything goes bananas in the world.
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0 sats \ 0 replies \ @SimpleStacker 15 Dec 2023
Oh f**k
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0 sats \ 0 replies \ @PRA3S3NT1A 16 Dec 2023
I am not sure I fully understand. Why will hit a inflation storm in 2025? Aren't cut rates help the economy because the interest on borrowed money becomes less (cheaper). Therefore, people and businesses can borrow more money which makes more liquidity on markets? Could someone explain how it works ?
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172 sats \ 1 reply \ @jmarbach4 15 Dec 2023 freebie
Container ships may be taking longer routes, which will lead to slightly higher fuel costs for any goods that previously transited the Suez.
Tankers are still proceeding through the Suez. If the tankers pursue alternate routes, the increased fuel/energy prices will impact the price of everything worldwide that depends on oil and gas (a lot!).
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0 sats \ 0 replies \ @kr OP 15 Dec 2023
interesting, do you figure most holiday shipments have already arrived at local distribution centers, or could an extended delay in the Suez canal cause shortages of items in stores around the holidays?
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