Can a Single Boat Drive Up Inflation?

The Spotlight

1 minute read

Mar 29, 2021

Aerial digital map of the Ever Given being stuck in the suez canal and block the global supply chain while pushing prices up.

How the Ever Given story lifts the veil on our strained, inflationary, and unstable system.

Last week, somewhere, a ship got stuck.

And this ship, the “Ever Given” is now a telling example of how on edge our system really is.

Analysts and investors have been fearing inflation since the start of the pandemic last year as governments across the globe started printing money like there was no tomorrow.

Literally trillions and trillions of dollars created out of thin air in less than a year.

But funnily enough, the last drop in the inflation bucket could now come from a boat in the Suez canal.

In only a few days the Ever Given’s misfortune has already impacted oil prices, sent freight shipping rates even further through the roof, and have started affecting the already strained global supply chain in the process.

Add to this a Covid-19 crisis already causing disruptions in port operations, and global lockdowns prompting consumers with newfound income (aka stimulus checks) to spend more money on imported goods, and costs of imported goods could soon be going up.

This is why some analysts are starting to think that if this canal blockade were to last much longer it could cause “significant disruptions to global trade, skyrocketing shipping rates, further increase of energy commodities, and an uptick in global inflation,” as JPMorgan warned.

So: unprecedented money printing + higher demand + costs going up = inflation?

This will likely depend on how long this boat crisis will last.

But we’re wondering: if a single boat can risk to drive up global inflation, are we really in a stable system?


The Spotlight

The free newsletter helping you understand how to build your wealth.


Get the Spotlight

The free newsletter helping you understand how to build your wealth.