Geopolitical Expert Peter Zeihan has a strong message about energy prices in connection to the Russian invasion of Ukraine.
“We should have a food shortage by the fourth quarter, an energy shortage at some point in the second quarter, and both of those are going to last years,” Zeihan explained on the DistributED with tED magazine podcast. “Just the nature of the destruction and the nature of the Russia infrastructure means this this is going to go off-line, and it’s not going to come back any time soon. This is the world we need to prepare for. One with much higher energy prices.”
Zeihan will be the keynote speaker at the upcoming NAED National Meeting, a role he played with incredibly positive reviews at the 2021 NAED Virtual National Meeting. This year, he will give a new presentation in-person at the Westin Kierland Resort & Spa in Scottsdale, Arizona on May 17-20. Zeihan told the podcast that with so many changes in world events, he will be changing and working on his presentation right up until the day he takes the stage for the NAED audience. But, with so many events surrounding the Russian invasion, we can expect to learn how it impacts electrical distributors and manufacturers.
“Right now, the sanctions against Russia ban everything except raw commodity exports,” Zeihan said on the podcast. “But, because insurance companies are not covering ships in the Black Sea, we are seeing severe interruptions for the Russians to export anything right now. So we are looking at 4 or 5 million barrels a day of Russian oil falling off the market.” Zeihan adds Russia is quickly running out of space to store the oil it has already drilled.
Zeihan believe the damage is already done in Ukraine, where infrastructure is so damaged it will be extremely difficult to repair or rebuild. That means a country that participated in the world’s economy does not exist right now, and may not for many years. “What we are looking at is the complete obliteration of all civilian infrastructure, which will remove Ukraine from any pretense of participating in the global economic system,” Zeihan reported.
It also means millions of people will leave Ukraine to begin a new life in a different country. That may have some positive impact on the number of people needed in the workforce, but that impact may take years to start. “You are taking the demographic future of the second most populous country in Europe and removing it. You should count on at least half of these people who are fleeing will never come back. Huge numbers of Ukrainians to become refugees. And we are probably going to hit 10 million refugees within two or three months. We’re already at the largest population shift in human history, and it’s probably going to triple in the next 90 days. But there is a little silver lining, Europe will receive a workforce shot in the arm. Sure, they are skilled, but they are fleeing without suitcases, and there are no assets. They are skilled, but they bring no capital and they have to start from scratch.”
Following Zeihan on stage is Economist Dr. Bill Conerly, a business-focused economist with a Ph.D. in economics from Duke University who writes a regular online column for Forbes Magazine. Dr. Conerly’s presentation “Economic Forecast 2022: Inflation, Supply Chain and Labor Challenges” will connect the dots between current economic conditions and your strategic decisions. During his appearance on the “DistributED with tED magazine” podcast, Dr. Conerly also mentioned that due to changing economic conditions, he will be creating his presentation specifically for NAED members and within hours getting on stage. He added that this is the first time in his career he will have to look at different factors to help you make decisions. “Usually, my economic forecasts are based on demand,” Dr. Conerly said. “How much are consumers going to spend? How much are businesses going to spend? How much is government going to spend? But now I am looking at these supply constraints very closely, and labor is biggest one. But things like computer chips and just the shipping issues, those are key issues, too.
“I have been forecasting for years, and this is the first time I have seen these supply shortages, and labor is a part of the supply shortage. We see help wanted signs everywhere. I am seeing people going back into the labor force as businesses and schools are reopening. Before the pandemic, every business leader I spoke to said they were struggling to hire fill positions. The pandemic made it worse, but it was bad even before that because we are in this decade with Baby Boomers retiring.”
In addition to regular booth meetings for distributors and manufacturers, the second General Session at the NAED National Meeting will include a look at your data and technology needs for the future, including the analytics you will need to stay ahead of your customer’s needs, and the use of AI and machine learning in the future to remain a connected business.
You still have plenty of time to register for the NAED National Meeting before the April 22 Early Bird Deadline. You can go to www.naed.org/2022-national-meeting to register.