When I wrote about Weimar back in February, I forgot to mention supply disruptions as one of the things that happened shortly before and during the great German hyperinflation. But now that the news are full of stories related to supply disruptions, I thought it worth mentioning, because this too is eerily similar to what happened in Germany back in 1921.
The supply disruptions back then were due to two main factors. Cheep credit made it attractive to buy high tech stuff, simply to own it and sell it later at a profit. It made it also attractive to delay sales of more mundane goods such as building materials. Any delay in delivery was an opportunity to make some extra money due to the sheer upward price momentum. While there were real shortages for high tech goods, building materials and commodities in general were simply held back and delayed.
Fast forward one hundred years to today and we see the exact same pattern. Lumber is piling up in storage while builders are screaming for more. High tech computer chips are nowhere to be found. By the looks of it, we're well on track for a repeat of the Weimar hyperinflation of 1922 to 1923, but now at a global scale.
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