inflation triggers stockpiling again

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huge queues at the gas station, supermarkets rationing some products, one liter bottles of oil with anti-theft… And it is that, as they say Mark Twain said, “History does not repeat itself, but it rhymes”. Because who could imagine that (for different reasons and under different circumstances) both March 2020 and March 2022 were going to be released with empty linear and thousands of people collecting everything that can be accumulated? But are we really at risk of falling into hyperinflation and depletion or are we overacting in the face of a transitory phenomenon?


warning signs. The truth is that, although the media attention has focused on sunflower oil, price increases are widespread. Perhaps the most striking are hydrocarbons: The liter of diesel is 20 cents more expensive than a week ago and that of gasoline, 15 cents. But no, it is not an isolated incident. In February, before the bulk of the economic consequences of the war in Ukraine could be felt, prices rose 7.6% compared to last year. We are talking about the biggest escalation since December 1986.

The Ukraine conflict is going to claim two unexpected victims: fertilizers and wheat

And there’s no sign that this is going to end. So much so that governments, unions and employers have sat down to agree on a “rent agreement”; that is to say, an agreement between the social agents that control both the increase in salaries and the growth of business margins and, thus, stop a possible inflationary spiral. It is, saving the distances, the closest thing there is to a “devaluation” considering that Spain cannot use monetary policy to control inflation. The ultimate result is the same: a generalized loss of purchasing power to try to avoid a hyperinflation scenario.

The answer? Accumulate. While the authorities and some consumer associations call for calm, social networks have been filled with photographs of gasoline pricesvideos of dozens of cars queuing to refuel and empty supermarkets. It is still early to know if it is something punctual and limited or it is only the first moments of a huge “snowball”, but fear and uncertainty are on the street.

And not only on the street. At a financial level, “the military invasion and the indirect effects of the sanctions on Russia (inflation, possible interruptions in energy supply, losses in companies with exposure to Russia and credit risk) are gripping the stock markets, generating volatility and inviting caution “, argued from Bankinter to explain the “selling panic” that was affecting the IBEX and the European stock markets in general. Many countries already speak openly of fear of hyperinflation and the uncertainties associated with the pandemic, the strikes in the transport sector and the war in Europe do not help to draw up a clear plan of action to avoid it.

But are we overreacting? That is surely the key question right now. Above all, because to the current situation, we must add that we are facing one of those economic phenomena in which “self-fulfilling prophecy” plays a key role. That is to say, that the “stockpile fever“When there is a fear of shortages, it can end up causing the shortage itself. It is, economically speaking, a whiting that bites its own tail.

However, it must be remembered that (except for very specific products) we have an inflation problem, not a supply problem. A priori, we have no rational reason to think that production and distribution will be cut precisely when it is most profitable. So the stockpiles, at least at this particular moment, are more the result of mass hysteria than rational calculation.

huge queues at the gas station, supermarkets rationing some products, one liter bottles of oil with anti-theft… And it is…

huge queues at the gas station, supermarkets rationing some products, one liter bottles of oil with anti-theft… And it is…

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