What is your reaction when you need to fill your car with a $1.90 – depending on the province you live in when a litre last year it was $1.06?
➼ By now, we all heard that the world has run short of a great many products and as a result all prices have been going up from construction materials to food, gasoline, computer chips and I am certain you can think of other items.
➼ For the past couple of years we have been hearing how the supply and demand chain is being disrupted due to the pandemic in 2020/2021 and starting 2022 news of the economy likes to tell us that the war in Ukraine disrupts normal supply and demand of almost everything we use.
➼ Needless to say there are real issues with the pandemic and the war, China today has cities under lockdown, and factories are out of commission as no one is allowed to go to work in the city of Shanghai with 26 million people as well as other smaller cities are under a lockdown.
➼ I don’t think that the situation is so helpless, let’s not forget that there will always be the greedy companies, nations, and people that will take advantage of a situation. As an example: Russia is using oil as a weapon, while Saudi Arabia, Qatar, Canada the USA and others can produce each more oil daily to cover the shortage and lower oil prices….. I guess Trudeau knows better so Canadians pay almost $2.00 a litre.
➼ Supply and demand are one of the basic ideas of economics. In a free running market, the price of a product/service is determined by the amount of supply of the product and the demand for the same product or similar.
➼ What is supply? The supply of a product is how much of the product/service or similar alternative is available for purchase at a given price.
➼ The question I always ask is: How real is the situation and what drives it?
Most times the answer to both is…. not so real…. and GREED
Do you agree?