Why Everything Is Suddenly Getting More Expensive — And Why It Won’t Stop

By Author: umair haque
Total Articles: 1
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I have some bad news, and I have some…well…worse news. We’re at the beginning of of an era in economic history that’ll probably come to be known as the Great Inflation.
Prices are going to rise, probably exponentially, over the course of the next few decades. The reason for that’s simple: everything, more or less, has been artificially cheap. The costs of everything from carbon to fascism to ecological collapse to social fracture haven’t been factored in — ever, from the beginning of the industrial age. But that age is now coming to a sudden, climactic, explosive end. The problem is that, well, we’re standing in the way.
Let me explain, with an example. I was looking for a microphone for a singer I’m working with. I was shocked to read that a well-know German microphone company had just…stopped making them. And furloughed all its workers. It didn’t say why — but it didn’t need to. The reason’s obvious. Steel prices are rising, and they’re going to to keep rising, because energy prices are rising. Then there’s the by now infamous “chip shortage,” chips they probably rely on, too. ...
... Add all that up, and bang — you’ve got an historic company suddenly imploding.
I’ve heard story after story like this. Small or medium sized companies just…shutting down. They can’t get raw materials. They can’t afford the raw materials they can get. In either case, bang, it’s game over — for the foreseeable future. It’s not just a microphone company — I’ve heard similar stories in industries from medical devices to auto parts to technology. So far, this is just anecdotal — precisely because it’ll take a year or two for the quantitative data to reflect it. But we don’t have to wait that long to see what’s right before our eyes.
The economy is undergoing a profound shock. Unfortunately for us, it’s going to be one of the largest shocks in economic history. It’s a “supply shock,” as economists formally call it — perhaps the greatest of all time. No, I’m not exaggerating. The world can’t get microchips right about now.
A “supply shock” means, in this case, supply itself suddenly implodes. A city’s, town’s, country’s, or in this case, a world’s.
Let’s think about that microchip shortage. What’s it really about? Well, there are three factories in which the majority of the world’s chips are made. Three factories — each hit in a different way. The one in Japan caught fire due to an equipment malfunction — apparently the blaze took hours to put out because of the conditions. The one in Texas was hit by an historic snowstorm, which knocked out power for days. The one in Taiwan is being affected by the worst drought in half a century — and microchips require huge amounts of water to manufacture.
These are all effects of climate change. They might not be the kinds of monocausal direct effects climate change deniers and American pundits look for — the hand of God roasting a factory alive — but they are very much caused by living on a rapidly heating planet. It should be eminently clear to see that when factories are freezing and burning, that is what climate change does to an economy before your very eyes. (And even if you think the Japan fire had little to do with global warming, the face of the matter is that without climate change, two of the world’s largest chip factories would still be open.)
The “chip shortage” is something that the world doesn’t really grasp yet, in its full importance and magnitude. It is the first climate catastrophe related shortage to hit us at a civilizational, global level. In a world of stable temperatures, guess what, we’d probably still have microchips to power our cars and gadgets and AV studios, because factories wouldn’t be losing power or be so parched they don’t have enough water. But they are — and so we do have a microchip shortage that has been caused by climate change, aka global warming.

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