First name / Friend, the global economy is going through one of the most unique times in the history of our planet. Few, if any, events in human history have impacted the world like the COVID-19 pandemic. The world economy went into a year-long pause, not because of market events or bubbles bursting, but because of health and safety concerns. This meant that the events leading to “The Great Shutdown” were caused by variables outside of the economic spectrum. Demand for almost every product on the planet (expect maybe masks, sanitizers, and Lysol wipes) went down to levels never heard of. Entire manufacturing plants were closed and workers were sent home. 

 

Now, fast forward to today; vaccine roll-out, public policy, and scientific research has allowed us to go back to our day-to-day with an ease not predicted by experts during the pandemic. Demand shot up to pre-pandemic levels faster than most industries expected due to what was explained earlier in the shutdown coming from factors outside the global markets. So what happens when consumers still have the money they had before the shutdown, and they are told they are able to slowly get back to business? They become ecstatic. And like the “Wealth of Nations” by Adam Smith explains, the irrational human-beings drive the economy by acting in their own self interest (Look up “The Invisible Hand Theory” for more information). Consumerism attacked once again and individuals, companies, and governments began to invest their money and efforts into continuing purchases that were put on hold during the pandemic. Top that with low-interest rates and worldwide inflation and you get the stressful supply chain crunch we are in today. One bottleneck in the supply chain slows down the entire chain, resulting in delays of product and price increases. Naturally, supply and demand drive prices. So if supply is low and demand is high, prices will shoot up, as we are seeing now a days. Here at Arwani Law Firm we want to make sure you are taking smart financial steps to prepare for the unforeseen future. We will all look back at this point in time and realized we were in the middle of history unfolding. Stay safe.