Good dog? I don't think so.

Supply Chains, Inflation, and the Puppy Multiplier

Summary: I’ve been struggling to understand the link between supply-chain problems and spiking inflation (at one point I could see from my office window 100 ships lined up waiting to unload containers in Long Beach.) . I have finally figured it out. it’s the puppies. Puppy-Gate is the underlying cause of both inflation and the supply chain mess. Lonely people, pockets overflowing with helicopter money, adopted 23 million puppies and other pets during the pandemic. It is a fact that for every 2-pound puppy, we have to buy 872 pounds of puppy “necessities.” I know this because one of the puppies is ours. This puppy multiplier explains why ships have been waiting for months to unload containers filled with puppy “necessities”. Puppy-Gate is the cause of the supply chain crisis that has been clogging our ports, emptying our shelves, shutting down our auto plants, and pushing prices higher. Bad dog!

Willow Did It

Meet Willow, the newest member of our family. Before you ask, Willow is a Cava-Poo, a cross between a King Charles spaniel and a miniature poodle. She’s about the size of a shoe box, which makes her a mobile unit. Turns out Willow needs a cascade of stuff.

Puppy Multiplier Flow Chart

After we clicked the Buy button, it took 4 weeks for Willow to arrive, but the Amazon boxes started showing up on our porch right away. She has now been here 3 weeks and the boxes haven’t slowed down. So far, we have purchased 872 pounds of puppy stuff for this 2 pound dog, which amounts to a 436x puppy multiplier. We are proud of the economic support we provided to shipping companies, longshoremen, cardboard makers, and makers of squeaky toys. We now have our own personal UPS driver; his name is Mike.

Multiply our Willow experience times the 23 million puppies adopted and you get just over 20 billion pounds of puppy stuff, which is more than enough to clog up the ports, create a shortage of truck drivers, and drive prices to the moon. All this forced the Fed to wake up from its long nap and finally do its job.

Willow says she is sorry for starting all this but she needs another new squeaky toy and wonders if we still have time for same-day delivery.

PS: In case you want even MORE information about the supply chain crisis I strongly recommend that you follow Lori Ann LaRocco on LinkedIn. I read everything she writes. Lori Ann is a good friend, a CNBC editor, and has the most current facts on supply chain snafus—she calls them hairballs—of anyone I know. As she will explain, the ship backlog has moved from Long Beach to Shanghai but it’s worse than ever and likely to remain so for a long time. I will write a serious piece on this in the next few days. For me, there are two technical reasons behind the hairballs Lori Ann describes. One is the way an accelerating flow of viscous fluid triggers turbulence in a pipe. The second is important differences in the network architectures of the physical supply chain and the financial supply chain, i.e., the credit ,markets. Together, they explain why the supply chain crisis, as bad as it is, has not caused as much damage as the 2008 credit crisis.

Dr. John