An increase in demand due to global rolling lockdowns and now a back-to-work surge, crimped supply lines, factories that are still not operating at full capacity, not to mention large chipmakers in Texas that were affected by the statewide blackout, and it all leads to a market that's way over-stressed.
Markets don't seem to be responding to the news at all. Stocks like AMD and Intel have barely budged ahead of the big Federal Reserve meeting.
It's very likely investors see this so-called crunch as transitory. At some point, supply will rise to meet demand. The question in my mind is "when?" And I'll tell you why it matters.
Of all the so-called deflationary forces at play in the global economy, technology is often named as a top culprit.
Since the economic textbooks were written, a much larger portion of people's disposable income is diverted to things like Apple Watches and telecommunications, which generally don't fit into the market basket of goods and services that make up the consumer price index.
Therefore, a sharp spike in the price of technological devices, such as one we are now likely to see, may not have much impact on the CPI, but it will certainly spell inflation.
It's more money competing for fewer goods.
