But are we really running out of chips?

There are a lot of rumors that we are (or would be) running out of chips, and that because of this the economy is in crisis. These are statements that I personally find fanciful.

First, let's eliminate raw materials from the discussion. The raw materials market is characterized by the so-called “Futures”. Futures are advance purchases, like binding reservations, which are made on the commodities themselves. If the price rises unlikely WITHOUT the futures have risen, it means that whoever holds a future from last year is damn rich today.

If the relationship between today's price and that of a year ago were, as some write, one dollar to two hundred, the stock exchanges would be celebrating thousands, if not millions, of new billionaires.

I'd cut it short on this: futures started to rise in price much earlier, so it's no surprise and the latest Chinese moves have little to do with it. Other than buying futures, which they actually did. Why are they communists and do they plan? No, because they are competent, which our ruling classes are not.

Having said that, let's go to the other side of the suplly chain, that is, to the side of the most sophisticated products. The price of the chips is said to have risen dramatically, even 1: 800. Which is true, but … why?

There are several factors that determine this admirable result, and ALL are due to the stupidity, incompetence and narrow vision of a specific class of people: the so-called "managers". Those who should know how to "manage", and who instead are masters of nothing. If there was a Faculty of Nowhere, they would be the applications department.

Let's go in order: the warehouses are empty. Why are they empty? Because the main characteristic of today's “manager” is the lack of courage. Seriously, they shit for nothing. They call it "risk allergy", but the correct name is:

COWARDICE.

You shouldn't be surprised if you see the bags panicking every three for two, and not even if the word "Panic" is the most used in that environment. When I hear that there should be more women in the stock market, I usually reply that I agree, as long as there are also some men. The stuff that's inside the bags now, I don't know how to define it.

So, what did these "negative heroes" do? They said “well, since we don't know when the Coronavirus will end, why keep the warehouses full? Let them empty! What do we know about what the situation will be like in two years? "

I mean, at [Random Car Company] they weren't sure they would still be making cars two years later, so why fill up with car parts? What if we only produce self-driving condoms in two years?

Because they could not imagine what they would produce in two years, fearing that the company would produce things other than cars (as if several later models shared less than 90% of the parts), they decided not to buy components. And I took [Car Company at random] as an example, because ALL the managers of the industrialized West made the same choice.

And it went well: just think if now ALL were making only self-driving condoms. (electric, of course. The diesel condom is dead.)

The first cause of this lack is the COWARDY of the managers, who considered it too risky to think that in two years the company would still produce the same things, and therefore having the warehouses full could be useful for the restart.

The second problem is, as they pointed out, China. Apparently the Evil Dr. Fu Manchu insists on thinking that….

A moment.

First of all, the problem is that Evil Dr. Fu Manchu THINKS.

And if you think about it, and you are an industrial power, it doesn't take long for you to understand that since production is done with raw materials and labor, if in two years you will still have "the job" (that is, your inhabitants are not all dead) then you have to make sure you have the raw materials.

Because the problem is not, as some cazzaro writes, that China has filled the warehouses because "it is a planned economy (therefore communist)". The problem is, ANY economy that makes sense is planned. For this there are supply chain managers.

If you look at your home refrigerator, you notice that it is full of "things". Things that, coincidentally, "are eaten". And so, miracles of communism, in the morning you don't have to go and buy all the things you need for breakfast at Wung's. You don't have to go to the supermarket to buy shampoo to shower EVERY DAY, and that's because you have a whole bottle at home: much more than what you need for a single wash. Are they the miracles of communism? Absolutely NOT: it's just common sense.

And therefore, if an industrialized nation with an immense internal market and a competitive foreign market has resources, it is not because “it is a planned economy with communism”. No. Any supply chain needs queues. From that of your home to that of Apple.

To say that there is a shortage because China has stocked up is like saying that the supermarket was closed because the Rossi family does the shopping for a week every week. And when Ms. Rossi finds something on offer, maybe she buys double it. Pure communism, the housewife Rossi.

Why do I mention this special offer thing? Because in May 2020 the raw materials WERE on special offer:

And so housewife Wung hopped up on special offer stuff, while housewife Rossi chatted with Tyrone. And now, look a little, it happens that the housewife Wung has a full refrigerator, while the housewife Rossi has a faint salty taste on her cervix. How strange, huh? Here's what happens when you mix communism and Tyrone.

Now, now the Karen of Corriere della Sera arrive to inform us of the evil communism that would have bought up because it is a planned economy: EVERY economy requires a minimum of planning and queues, darling. Even the western one. The trouble is that our supply chain managers were intent on getting their sphincter bombed by some Tyrone, while the Chinese ones did… supply chain managers.

The second failure of Western management was to think that commodities can be found in any quantity, always, in any case and at the same prices. "Undifferentiated access," say their books.

And Tyrone approves.

But management is the best of the best of the best, and therefore always does the best. Because they spent two years with all their mobs in the Home Office, with a lot of free time because “Agile takes care of it”, but obviously they were busy. Busy doing what? To prepare the "restart". Interesting.

Let's examine the concepts of the market, the ones that determine the price. In addition to supply and demand, we could talk about elasticity, and ask ourselves if demand is elastic or inelastic. If you need medicine to live, the demand is quite "inelastic" and you will pay any price. If you need the medicine to avoid sneezing twice a day, the price has a precise limit, the one in which you say "I keep sneezing".

Well.

Well, because it would have been enough to ask oneself how elastic the demand would have been, the moment in which the whole West (or even only Europe) were "restarted". Because the "restart", like the "departure", has a peculiar characteristic: it must happen at a precise moment.

And if it has to happen TODAY, then the raw materials and components, you need TODAY. And if you need it TODAY, elasticity is no longer what it used to be. And if while Tyrone was bombarding your ass you also let the warehouses empty, TODAY means TODAY. That is YESTERDAY.

Shit elasticity: the only elastic thing Tyrone had on his dick, and it wasn't the demand for components.

The result of this marvelous “management” is that at the moment of the restart it was done in such a way as to produce a peak in demand, and as if that were not enough, to reduce the elasticity. OBVIOUSLY, the price has skyrocketed.

Who tells me that managers understand something about the "market" activates, in my mind, the image of Lexington Steele the drills Brooklyn Lee's ass, and I can't get the sequence out of my mind until you insist on telling me that "the management ”understands economics and the market.

But then, you will say, are these components in short supply or not?

Covid did not destroy factories. It hasn't changed the number of customers. It hasn't destroyed mines. It hasn't canceled trade routes. China still wants to sell the same things and we still want to buy them. (because if there was "decoupling" we would not have problems)

Production didn't collapse.

What happened is that a widespread class of CIALTRONI (called “managers”) created, by all committing the same mistake for the same reason, a situation of peak demand, taking care to produce inelasticity.

COMPONENTS ARE NOT MISSING.

They cost a lot.

And they cost a lot because "the management" has decided to buy everything at the last minute, and moreover in a situation without contingency, or in a situation of INELASTICITY.

The perfect conditions because the price skyrockets. You know when you all show up at the toll booth at the same time to go to the same place? How much is a free lane worth in this situation? Much. Because the demand is huge and at the same time you are stuck, so you can't do anything but buy. Very low elasticity.

Here, this is what is happening: a pile of charlatans, called "the management", has managed to create incredible conditions, and moreover incredibly to their own disadvantage.

And as if that were not enough, now they accuse the Chinese of having taken advantage of the sales (which THEY caused by stopping buying !!!), as if it were the result of the evil of communism. When it's just good practice.

And now? And now he expects the price to drop, that's all. As soon as the warehouses are full again. Which the supply managers should have done, instead of getting Tyrone bombed his ass.

And when I say "he expects" I don't mean that as soon as someone unties you, you're all shopping. Why do you repeat the same mistake. And as if that weren't enough, you will repeat it TO THE DISADVANTAGE OF YOUR PERSONAL POCKETS.

So, you will.

And Tyrone will be proud of you.

Happy "Black" Friday. LMAO.