Saturday, April 13, 2024

The Supply Chain Crunch and a New Financial World Order – an Interview with Tarek Naemo

With the world coming back to normality, it is still bearing the aftershocks of the COVID-19 hit in various forms. One such area that Tarek Naemo, the president of Richmond Hill Capital Management, mentioned is the supply chain that got disrupted significantly due to the instant measure taken in response to the pandemic- the lockdowns.

Tarek described that people are in a daze and everyone has their own interpretations of what’s happening out in the world. Here, Naemo provided us insight from his perspective on the unfolding events the world is facing.

Upon first impression, one may assume COVID-19 has got everything to do with the health of the people, however it has impacted aspects of ‘wealth’ as well. It has interrupted the core of the financial cycle, but one might ask how?

No longer are the days where one could order whatever needed and have no doubts in arrival time, or have to consider factories, container ships, or trucks involved in the delivery of goods.

Multiple national and international lockdowns impacted the movement of raw materials to the manufacturing market and similarly the finished goods reached the final market with severe delay, and that’s if they ever reach their destination at all. All in all, we saw a massive halt in production, the supply of goods hit a low, the prices increased as well as the demand, and the entire financial cycle experienced turmoil, Naemo explained.

Nearly 73 million containers run around the globe to supply food, oil, steel, cars, plane parts, ships, microchips, construction material and other essential products. With the borders being

closed and the world practically facing a closure, these nonpenetrating containers remained stuck and the productions were forced to slow down.

According to the basic demand and supply law, Naemo outlined the ongoing trends and stated that with a decline of supply in the market the economy saw inflation in the prices both due to the shortage of raw materials and also because of the limited availability of resources. In

response, the demand declined for many luxuries and people only shifted to fulfilling their bare needs. This caused global distress amongst all social classes.

Behind all of this, he believes a new financial world order is underway, while both the supply and demand are unpredictable. The unpredictability will continue to remain until the various variants of COVID-19 stop emerging or when the world is able to get a better grip on the

constantly changing circumstances. His intuition knows things will go back to ‘normal’, however he concludes it will most likely take 1-2 years at minimum to see that change.

To learn more about Tarek Naemo & Richmond Hill Capital, click here.

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