The past several decades of economic globalisation was built on a relatively high level of trust in global markets - with companies generally expecting that raw materials and goods could be sourced for a predictable price in a reasonable time frame.
But recent events such as Covid and wars have revealed just how vulnerable supply chains are and now there is an increasing tendency for governments and corporations to stock pile reserves of resources.
And for us ordinary people too, just on a more household-level.
many countries are now busy building up strategic reserves in oil, gas, microchips, rare earths, you name it.
And on paper this is entirely logical. If trade grinds to a halt, those stockpiles buy you time.
But here’s the catch.
The more everyone hoards, the worse it gets for the system as a whole. Stockpiling pulls goods off the market, pushes up prices, and spooks others into doing exactly the same thing. It’s easy to see how fear and competition can set off a worldwide insecurity spiral.
And we could maybe draw a parallel with The Great Depression cwhich hanged the mindset of a generation; people got into the habit of saving and stockpiling because they’d lived through real scarcity.
And maybe we are seeing a return to this today...?
What with ao many countries scrambling for the raw materials beihnd AI tech it seems we're a long way from the free trade optimism we saw in the 1990s and early 2000s.
Now Nation States are acting much more like they are on their own...
But this isn't so much about greed and ambition, it's more due to uncertainty and fear of future shocks....
In fact I think maybe people would think governments irresponsible if they weren't preparing for future shocks, I mean we know their going to be coming, we just don't quite know when or what the nature of them is going to be!
