The world is not helping inflation to calm down?
The global effort to combat inflation, by maintaining high interest rates, aims to ensure economic stability worldwide. However, geopolitical tensions in certain regions are contributing to increased inflation.
On April 2nd, a Ukrainian drone targeted Russia's third-largest oil refinery, situated approximately 1,300km from the front lines, impacting a unit processing around 155,000 barrels of crude oil per day. Such strikes aim to diminish Russia's oil revenue.
In another incident, an attack on Iran's consulate in Syria, attributed by both Iran and Syrian officials to Israel, has escalated tensions. Iranian Supreme Leader Ayatollah Ali Khamenei pledged retaliation, hinting at potential escalation beyond the Israel-Hamas conflict in Gaza.
Given that Russia and Iran are significant oil producers, ongoing geopolitical tensions have led to concerns about future oil supply, resulting in heightened oil prices. Elevated oil prices contribute to inflation as oil is a crucial commodity for the global economy.
On April 2nd, a Ukrainian drone targeted Russia's third-largest oil refinery, situated approximately 1,300km from the front lines, impacting a unit processing around 155,000 barrels of crude oil per day. Such strikes aim to diminish Russia's oil revenue.
In another incident, an attack on Iran's consulate in Syria, attributed by both Iran and Syrian officials to Israel, has escalated tensions. Iranian Supreme Leader Ayatollah Ali Khamenei pledged retaliation, hinting at potential escalation beyond the Israel-Hamas conflict in Gaza.
Given that Russia and Iran are significant oil producers, ongoing geopolitical tensions have led to concerns about future oil supply, resulting in heightened oil prices. Elevated oil prices contribute to inflation as oil is a crucial commodity for the global economy.
Speaking about commodities, 130% increase in cocoa prices?!
Global cocoa prices surged due to the El Niño weather phenomenon, causing erratic weather patterns in West Africa. Major producers like Ivory Coast and Ghana, responsible for 70% of the world’s cocoa, faced heavy rains, dry heat, and disease outbreaks, leading to a squeeze on cocoa supplies worldwide.
To stabilize cocoa prices and ease fluctuations, it could help to increase supply from other regions like Brazil or Ecuador. However, this solution requires a long-term investment in ramping up production, which may take several years to yield results.
In Indonesia, the government is concerned that the surge in global cocoa prices could soon impact domestic food and beverage producers. The Industry Ministry is urging companies to prepare for potential effects on their businesses.
As for Malaysia, Guan Chong the world's fourth-largest cocoa grinder, is benefiting from the rising cocoa prices. While this may seem positive in the short term, it could have negative consequences in the long run. Eventually, as prices climb too high, consumers may reduce their chocolate consumption, leading to lower demand for Guan Chong's grinding capacity.
To stabilize cocoa prices and ease fluctuations, it could help to increase supply from other regions like Brazil or Ecuador. However, this solution requires a long-term investment in ramping up production, which may take several years to yield results.
In Indonesia, the government is concerned that the surge in global cocoa prices could soon impact domestic food and beverage producers. The Industry Ministry is urging companies to prepare for potential effects on their businesses.
As for Malaysia, Guan Chong the world's fourth-largest cocoa grinder, is benefiting from the rising cocoa prices. While this may seem positive in the short term, it could have negative consequences in the long run. Eventually, as prices climb too high, consumers may reduce their chocolate consumption, leading to lower demand for Guan Chong's grinding capacity.
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razo2 : you are nothing getting it. inflation was created by printing 2 trillions back in COVID days. the commodities market is telling US to stop playing around and call for a recession since 2021. in case you didn't know 2020 is not a recession, at 2020 we are already due for a recession in the 10 years cycle. even Donald Trump knew this and ask JP to increase rates. now we are at 2024, 14 years over due for a recession, welcome to depression.
go see OPEC+ back in 2021 when the Energy Minister spoken and showed facts that they had helped the US in oil production across other commodities producers. But Biden and JP throw them under the bus by flooding the market with the SPR. do you think OPEC+ will trust US again? is just like you know a friend that owns you money, one day your friend ask you to borrow more money then you decided to lend him. then your friend spend it all on red on a roulette.
The US government is still printing money like a drunken sailor in which 890 billion goes into the military out of the 1 trillion approval by Biden in 2024. on one end you get the US federal government increasing the interest rates, the other end you get Yellen to print money like crazy. that is why the bond yield are up like crazy on the short and long term yield.
is just like your house budget spending. one side you have a fixed income from your salary. next moment you spend like crazy in credit card until you own money to the credit card company. what will the credit card company do? they will increase interest rates because you cannot pay up due to the risk. how do you solve it? you either earn more or you cut spending and pay off your debts. you cannot be cutting your rice money, car petrol money, medical and utilities money to spend more on your credit card.
These two wars will end badly. it is when US lose the war like a Vietnam war or when OPEC+ decided enough is enough and does an oil embargo against the US. then you will see the market fly down.