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The 2011 Thailand Floods: A Global Supply Shock

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Created December 8, 2025

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Video Transcript

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The 2011 Thailand floods wiped out 20% of global hard drive production. Hard drive prices

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in the UK doubled within weeks. A textbook negative supply shock. Production capacity destroyed,

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aggregate supply shifts left, costs rise. UK tech retailers couldn't fulfill orders.

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Small repair shops closed, couldn't source parts. Firms raised prices, feeding inflation.

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The Bank of England faced a dilemma. Countries scrambled for alternative suppliers,

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renegotiating contracts, premium shipping. One disaster rippled globally, impacting our inflation.

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That's interdependence in action.

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