Bull…Whip! Trade War’s Impact on the Global Supply Chain

Bull…Whip! Trade War’s Impact on the Global Supply Chain So far, the trade war has done nothing.  That is correct, NOTHING! Trade and business investment are halting to a stop, nothing is happening! This is a big problem!  The global supply chain as we knew it is suffering from paralysis as world trade is de-globalizing.  This is having a negative effect on asset prices across the board. The trifecta of 1. tariffs, 2. renegotiations of trade deals, and 3. the naturally occurring down phase of the business cycle has consumers and business halting consumption and investment because of uncertainty and rising costs. Uncertainty of interest rates, prices, tariffs, regulations and perhaps most importantly credit availability.  This in turn is negatively impacting revenue, income, cashflow and ultimately valuation levels across all asset classes. However, it is not all doom and gloom.  Even though the global economy needs to go through a period of painful adjustments and restructuring, as noted above, once we complete the down phase of the business cycle, consumption and investment will re-ignite.  Hopefully, by that time governments will also provide a clearer policy path and align incentives for consumers and business restart investing. Bullwhip Effect in the Supply…

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