A
Th e
Component Manufacturing dverti$er
Don’t Forget! You Saw it in the
Adverti$er
December 2018 #10233 Page #82
Lumber Briefs By Matt Layman
Publisher, Layman’s Lumber Guide
Lesson Learned: 2019 Will Out Do 2018
2
018 is a year for the record books. All time price highs followed by all time largest price drop in shortest time.
One very important lesson learned or reinforced was how significantly supply disruptions can influence price movement. The variable is the set up. Specifically, the state of Inventory Shift and the point in the price cycle at the time of the disruption determines the disruption’s impact. Well orchestrated disruptions prior to spring create the most bullish scenario. Resolution of the disruption results in a radical reversal. 2018’s disruptions were the winter Canadian rail shipment delays, large tariffs on imports and exports, increased U.S. production, decreased Canadian lumber shipments to the U.S., and higher interest rates. Higher interest rates were the only expected disruption. We can already see what the most significant 2019 disruption will be. That is WAR...TRADE WAR. The debate will be over whether the U.S. is justified as a retaliation for what we allowed to get out of hand, or if the WAR is an instigating act of aggression. All of that will be “noise.” The reality will be global economic turmoil. Immigration will be packaged with the WAR, which will alienate the U.S. As the trade disruption intensifies, military conflicts will intensify, with Russia leading the charge. Putin will back Trump into a corner that he is trying desperately to avoid: military action. Of the top ten armies in the world, U.S. and its only ally, South Korea, would total 1.97 million troops. Russia and seven allies would total 7.7 million troops. We are out manned nearly 4 to 1. Technological advantage neutralized when a nuke is fired. It gets worse. President Trump is no fool when it comes to money, his weapon of choice. In 2018, of the top ten economies, the U.S. and its six allies control 67% of that total. The remaining 33% is held by three Russian allies (Russia not in top ten). Continued next page
PHONE: 800-289-5627
Read/Subscribe online at www.componentadvertiser.com
FAX: 800-524-4982