People everywhere are running out of money.
In the U.S., 1 in 5 people with jobs now say they run out of money before their next paycheck. That’s 5% more than last year. And that’s according to a survey done back in February.
More dramatic estimates say that even among those earning six figures, 48% are now living paycheck to paycheck.
Same thing is happening in Scotland. 9% of people now say they always run out of money before the next paycheck, while 11% say it happens to them “most of the time.”
Things are even worse in Turkey. Due to their President’s belief-based economic policy, the Turkish Lira is becoming less and less valuable every month. The result? People standing in lines for bread and gas; farmers defaulting on loans; general unrest as protests become more frequent.
In Russia, the situation is catastrophic. As the prices of pretty much everything reach sky-high levels, people are having trouble withdrawing cash from ATM machines. Moscow citizens are scrambling for the last available iPhones and McNuggets, while Putin keeps calling Russia a global leader in pretty much every available context.
How did all of this happen? Besides Turkey, two reasons: Covid and Ukraine.
When the initial lockdowns hit, people started spending a lot more money on goods rather than services. Electronics, in particular, were a major hit during the pandemic.
As the demand for goods rose, supply shrank. Lockdowns were particularly harsh in China, the biggest goods manufacturer for the U.S. Factories were closed, orders were delayed, and the prices rose.
There’s also something called the Bullwhip effect. Basically, as consumers start ordering more goods, distributors start over-ordering from manufacturers, manufacturers start over-ordering even more from their suppliers, and so on…