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Posted on 7/15/20 at 11:29 am to TheFlyingTiger
quote:
translation: the bubble is the whole economy now, not just housing
I think it's more of the start of a bullwhip effect when it comes to durable goods. The market was shut down for a couple of months, so there's pent up demand for these products. There's also a lack of supply since the factories that provide them were also shut down.
So now there's a temporary spike in demand and shortage of supply. They are running overtime to build more cars and trucks now - but once they meet the spike in demand, they will need to go back to normal output or risk oversupply.
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