Globilisations Benefits And Woes

In our globalised world ....

Globalisation Is Like Pandoras Box - Unpredictable

 ..... it's not just Asia, the UK and Europe who are suffering with the sudden return of inflation, the continued supply crisis, and food and energy shortages.

For instance in the USA, which in a different era (before WWII) could often ignore other continents woes (unless it was them that caused them e.g. the Wall Street Crash), the economy is in just a parlous state as everyone except China (which is riding out the inflation problem far easier than the rest of us, despite its Covid led economic contraction its still in growth).

In the USA:

• Consumer inflation is 9.1 per cent the highest rate since 1981.
• Producer inflation increased 11.3 percent the past twelve months.
• Food is up 10.4 percent unadjusted the past twelve months.
• Energy is up 41.6 percent.
• Gasoline is up 59.9 percent.
• Electricity is up 13.7 percent.
• Piped natural gas service is up 38.4 percent.
• Shelter is up 5.6 percent.
• Transportation is up 8.8 percent.
• Medical care commodities are up 3.2 percent, and medical care services are up 4.8 percent.

..... price increases not seen in the U.S. for more than 40 years, with interest rates still to rise to somewhere near real inflation rates as they are currently lagging behind (10-year US treasury Bonds still at just 2.9 percent). In fact despite the Biden administration trying to put a positive spin on the situation, according to the latest Economist-YouGov poll, 58 per cent of US citizens say America is already in a recession.

One virus, and one war, have dominoed the world from the comfortable (if somewhat uneven) growth of the last decade back in to economic and political crisis. The globalisation of the last 20 to 30 years which was lauded by some, despised by others, has meant that now when one economic block sneezes, we all tend to catch that same cold.

In the 19th century a war in Russia (e.g the Crimea War involving the empires of Russia, France, Britain and Turkey), wouldn't have caused inflation or major supply side problems outside of he immediate war region. Similarly the five cholera pandemics that started and ended in that century caused by the increased commerce, migration, and pilgrimage as transport enabled more travel and trade also failed to impact the entire globe, despite taking millions of victims.

We are now so intertwined economically (e.g. China is lacking in natural resources and relies on world trade  to import them, and especially western markets to export to, in order to pay for those resources), that we can no longer isolate or insulate ourselves against other regions woes ... globalisation has like pandoras box been truly opened, and its benefits and woes let lose, with unpredictable results.

Not least for the Biden Presidency with the Republicans possibly going the retake both both houses of Congress in the upcoming mid-terms and supporting more retractions of liberal laws.