The signs in the economy point to a storm. So far it has been possible to keep the system running to some extent through corona aid, short-time work and by printing money, but delivery bottlenecks, price increases and the associated rising inflation lead to fears.
In Germany alone, the inflation rate is higher than it has been in more than 30 years. The 5 percent mark has already been exceeded and there is no end in sight.
Not only many companies but also ordinary people have to struggle with the dramatic price increases in the construction industry or for raw materials and energy. After all, the costs are passed on to consumers. Part of the blame is the “climate policy”, which drove up the cost of heating and refueling enormously.
In general, goods and services cost 5.2% more than a year earlier, the Federal Statistical Office recently calculated. “The last time there was a higher inflation rate was almost 30 years ago,” said Statistical Office President Georg Thiel. The prices for all forms of energy rose by an average of 22.1%.
The prices for heating oil were hardest hit at 101.9%. For fuels like gasoline it was 43.2%. The CO2 tax introduced at the beginning of the year also has a negative effect. As a result, all other prices rose significantly – and wage developments are not keeping pace with this, real wages and purchasing power are falling.
In comparison, the inflation rate in Austria is currently “only” 4.3%. But many experts fear that this is only the beginning and that Europe will inevitably slide more and more into an economic crisis. For more and more people, the development is also becoming an existential threat, because everything is becoming more expensive: living, eating, heating. Weekly purchases are now 10% more expensive than last year! However, nothing is done about it.
The European Central Bank is sticking to its low or zero interest rate policy and is busy printing money while at the same time almost doubling its inflation forecast for 2022! In addition, there is a supply shortage due to disrupted supply chains, which further fuel the developments.
Because no matter where, everywhere there is a shortage – from wood and steel to chips and semiconductors, to the food industry to wheat or oil or the energy industry with coal, gas or crude oil. Further problems are likely to result in increasing company bankruptcies. (Crisis preparedness: emergency stock – long-term food)
Since the beginning of the pandemic, there have been warnings that corona aid will keep “zombie companies” alive, as bankruptcies have been postponed.
German wave reports:
The President of the Federal Association of Freight Transport and Logistics, Engelhardt, told “Bild am Sonntag” that Omikron has the potential to increase delivery bottlenecks and not all supply chains can be maintained. In addition to Omikron, the global shortage of drivers is also a problem. Engelhardt called for precautions to be taken now for emergencies.
Federal Transport Minister Wissing pointed out that he was already holding talks with industry representatives. Everything is done to keep the supply chains stable, he told the newspaper.
The ZDF writes:
“Unfortunately, it is not clear when the situation in the supply chains will improve in the long term. But I am sure that when we have defeated the pandemic, whenever that is, everything will flow better again, ”said the new President of the Association of German Shipowners, Gaby Bornheim, of the German Press Agency.
The tense supply chains are clearly the result of the corona pandemic. Due to the pandemic, we have a unique situation here in which a lot comes together. Gaby Bornheim, President of the Association of German Shipowners (From the energy crisis to a food shortage to a hunger crisis and to war?)
“We still cannot simply bring our seafarers on board as we are used to, and we cannot get them off board unhindered,” reports the head of the Hamburg-based Peter Döhle Schiffahrts-KG, one of the largest German shipping companies.
There are considerable restrictions that change in the individual ports on a weekly, sometimes even daily, rhythm, so that we have no certainty that we will now be able to change crews in many parts of the world.
Gaby Bornheim, President of the Association of German Shipowners.
For a long time, missing containers were also a major problem because the transport boxes were not where they should be for reloading due to delays in the timetables.
At Hapag-Lloyd, for example, containers are normally on the move for 50 days before they can be loaded again; due to the congestion in the ports, it is more than 60 days.
After all, many ports are proving to be huge bottlenecks – especially those on the Chinese coast and the American west coast, between which the huge trade flows between the two largest economies are handled. In China, ports have been partially or completely closed because port workers were infected with corona.
Ships have to wait days for loading and unloading or switch to other ports, in front of which also large traffic jams form. Due to the very strict reaction of the Chinese authorities and the unprecedented speed of spread of the Corona variant Omikron, closed port terminals in China are likely to remain an issue in 2022.
Also in front of the Port of Los Angeles and Long Beach in the immediate vicinity, the two most important ports on the US west coast, there are tons of ships in the roadstead, in the fall there were at times up to 100. In addition, the hinterland traffic does not work as it should, also because there are not enough truck drivers.
According to Stamer, the first improvement could be seen in February after the Chinese New Year celebrations. The festival is traditionally a high point of consumption in the most populous country in the world, after which consumer demand drops significantly.
“But even then, it will still take a while for the global delivery network to swing in sync again.” Vincent Stamer, Kiel Institute for the World Economy
Big wave of bankruptcies
In addition, many small and medium-sized companies have now completely used up their reserves. Recurring lockdowns and 2G rules then deal the death knell for many because customers and thus sales are missing.
The EU is also facing further heavy financial burdens for many, due to the planned renovation obligation for certain buildings.
Because the EU Commission proposes a renovation obligation for buildings that consume a lot of energy – around 15% of the buildings in the EU are affected. Rising rents and additional costs for homeowners in the name of the climate are inevitable.
But the EU is also continuing to work on an instrument of expropriation with the digital euro, because citizens can be controlled with a click of the mouse without cash. So 2022 will not be a quiet year and neither will it be like in the past …
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Sources: PublicDomain /wochenblick.at am 10.01.2022