Skip to content
The Starving Market
Menu
  • Home
  • About Me
  • Invest with MACM
Menu

Globalization Under Attack?

Posted on April 12, 2022April 13, 2022 by danemay

First off – what is globalization? It is defined as the process that moves businesses, organizations, workers, technology, products, ideas and inflation beyond national borders. We have all benefited from globalization through access to cheaper goods and services, cultural awareness and the transfer of information and technology. Many would argue on net it makes the world a better place, but critics argue it increases wealth inequality and makes economies more vulnerable. After decades of increasing globalization, due to recent events, we are finally starting to see a real pivot back towards protectionism and nationalism. With the invasion of Ukraine and new lockdowns in China just in the first quarter this year, both governments and businesses alike are making it a priority to rely less on others and become more self-sufficient. Throughout our time ramping up globalization, we have traded the resiliency and redundancy of our global supply chain for efficiency and margin improvement. Fortune 500 companies have increased profits at the expense of increasing their vulnerabilities. These recent “shocks” to the system have us facing the reality that globalization may not be as reliable as we once thought. What may we see as we go down the path of a more de-globalized world?


Governments
While deglobalization will not mean complete independence, we will likely begin to see additional budget carved out to incentivize domestic production. Prioritizing energy, food, technology, and medicinal security.  We may see a bifurcation in trade relationships.  Creating even stronger relationships with other democratic countries while continuing to pull away from reliance on autocracies like China and Russia.


Businesses
Similar to governments, we will likely see increased investments to begin re-shoring supply chains to withstand more impacts and adapt to market shifts/shocks. We should see a shift towards a preference for inventory overstocking and diversifying suppliers. At the end of the day, each company will have to find the right balance between efficiency and resilience.

De-Globalization Impact on our Economy
Shifting to economic independence has its advantages but it does not come without a cost. The biggest challenge which may be a result of this is the elephant that is already sitting in the room: inflation. The most enticing aspect of globalization was cheap labor in order to manufacture goods. By moving production back to the US our input costs rise significantly likely leading to pricier goods. With inflation already being the biggest problem our country is currently facing we are watching closely how both governments and businesses are reacting and their ultimate inflationary impact.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Dane May


@danemay
I forecast what is happening next in the markets at Mitchell Anthony Capital Management I blog here about my thoughts on all topics but mostly tech! More about Me.

Social

Dane MayFollow

Dane May
danemayDane May@danemay·
24 Sep 2020

Great overview of what is going on with the potential SCOTUS replacement and how it may shape voter decisions. http://thelongstoryshortblog.com/passing-of-ruth-bader-ginsburg-key-takeaways/

Twitter 1309215998373888001
Retweet on TwitterDane May Retweeted
WeAreMACMMitchell Anthony Capital Management@WeAreMACM·
17 Sep 2020

In todays Instagram post we look at the key takeaways from yesterdays FOMC meeting and what this means moving forward.
https://www.instagram.com/p/CFQGOpGDdo5/

Twitter 1306696416408956928
Retweet on TwitterDane May Retweeted
WeAreMACMMitchell Anthony Capital Management@WeAreMACM·
15 Sep 2020

Latest post on our instagram page showcases some of the recent updates in the race for a COVD-19 vaccine. https://www.instagram.com/p/CFK5y8vDEh3/

Twitter 1305999526306566144
Load More...

Archives

  • July 2022
  • April 2022
  • January 2022
  • October 2021
  • July 2021
  • April 2021
  • January 2021
  • October 2020
  • September 2020
  • July 2020
  • April 2020
  • February 2020
  • November 2019
© 2022 The Starving Market | Powered by Superbs Personal Blog theme