The supply chain is simply empty, all the way up to the people who mine the raw materials. It’s going to take time to replace all the links in that chain, and it’s not because of the war in Iraq/Afghanistan, The Joos, FEMA, the CIA, a secret agreement to implement gun control through ammo availability, or any other silly theory you may have heard. This is a textbook example of what happens when an inelastic supply chain, composed with scarce “just in time” inventories, meets insatiable demand. It’s not sexy or intriguing, but that’s the way it is.
You know what’s scarier? Your food comes to you the same way. Imagine what would happen if…
And we were thinking about going shooting this weekend.
[Via Mark Danziger]
[Update mid morning]
Here’s a fact sheet on the ammo shortage.
Building and maintaining a robust system is expensive during the years when everything is working “just so.” The guy who runs “lean” will make higher profits than the guy who keeps a reserve all along the supply chain. In our Wall St. world of quarterly earnings reports that’s impossible to sustain for years and years. It takes a great deal of patience, and faith that the demand jump will come before you run out of money. The market can usually stay foolish far longer than you can stay solvent.
You know, 9mm is one of the most common calibers on Earth. There are literally 100’s of factories around the globe that can make this stuff.
If the .gov were responsive in allowing the necessary permits, much of this shortage could be resolved in weeks.
many of the factories that make ammunition are in
china or russian aligned states. Is it a good idea to
help gin up their business?
What’s a “russian aligned state”, aside from a bad grammar? And even if these states were Medvedev’s puppets, it’s not like buying Wolf to relieve Salt Lake City from civilian orders would endanger national security somehow.
I *am* going shooting this weekend. Maybe y’all just need to use less expensive toys? Plenty of shotgun shells on the shelves, last time I checked.
“Is it a good idea to
help gin up their business?”
We already buy everything else from China and if it keeps a Russian ammo plant from feeding ammo to Hugo Chavez, then my ginning them up is a good thing.
“If the .gov were responsive in allowing the necessary permits”
There’s your problem right there, Mike.
Especially this government. 🙁
I’d heard this supply chain stuff also brought up in the case of a pandemic. Shelves would get empty awful quick…
The flip side of all this is that a lot of people are buying more ammo than they will ever use. This article mentions non-shooters buying ammo as an investment, which reminds me of anecdotes about shoeshine boys buying stocks at the top of the market. At some point everyone who wants to buy will have bought, demand will go down, supply will catch up and prices will tank. I think this will happen sooner than many people think.
The difference with food is that there’s a considerable oversupply (funded by your friendly governments) right at the start and plenty of capacity to get that food to the hungry people who want it.
And thanks for the link, Jonathan. I wasn’t expecting a surge in gun and ammo buying as a result of the Obama election. The speculation in firearm gear seems a bit new. I wonder if there’s a change in technology or investor knowledge driving that speculation? Perhaps a combination of experience gained in flipping real estate or other investment combined with internet access?