A lot of talk has led directly to the winter caps!
The third year as a negative benchmark and an oncoming decisive 2022 winter
We already move through the last month of summer and the 2022 winter may seem so far away, so that we do not think about it, but the fact is that with so many analyses and discussions whether we pass through it bloodlessly because of the energy crisis is like we have already worn winter caps and decorated Christmas trees, without heating and air-condition, though!
It took six months after the Russian invasion in Ukraine in order to be concluded – almost undoubtedly – by political and financial analysts that the adventure in which we came into, is not a short parenthesis for peace but a serious global event with multi-level repercussions lasting not only a few months but a lot longer.
A new crisis emerged from the beginning of 2022 and the hope is to avoid the worst case scenario.
Thus, after 2010 and 2019, years that signified two large crises a financial and a health one respectively,2022 comes supplementarily to them, hoping that was the worst to come and will last for a long time. Because, unfortunately there is an even worse scenario if we think about that the biggest military alliance NATO participates unofficially-by proxy-in the war.
Inflation, energy and food crisis, the most intense geopolitical tensions from the end of Cold War, political turmoils. Everything is here and we already live with – although they are temporarily manageable- except for the food crisis that is just ahead us if we will not take measures. The ambience, the fear and the uncertainty for what it could happen day-to-day form the perfect kindling for the activation of a new global financial crisis. Or the previous one never ended?
Pending the upcoming winter we expound some aspects of the problem that have not been pointed out sufficiently but they might hide more substance than we think.
Europe is the hardest-hit
Although the basic description of the war confrontation is the conflict between Russia and Western world, Europe was definitely the hardest-hit because apart from all above, it tested by specific conditions in respect to opening-closing and increasing-decreasing natural gas flow determined by Russia. This simply leads the European governments reach their limits since LNG or other power sources are impossible to replace the natural gas deficit from the depleted Russian supply in this particular period of time according to the experts in the field of energy. The EUR/USD exchange rate plunge just confirms the above observation.
China’s stance makes western think tanks… sweat
From the beginning of the conflict China stood for Russia apparently without actively supporting it, as it is a paradox for China’s foreign policy, at any rate. However this deportment is a little specimen of a possible future consultation (attention: no alliance) among Russia China and Iran that make western think tanks… sweat.
Globalization restrain the tumble (for the time being)
In our modern times -once again- globalization is the main barrier for things not to go wrong and even badly breaking the rope and hold us away from a generalized conflict (rather than a regional one). The model of globalization forces -due to the intense interdependence- every regime (from the most democratic to the most authoritarian and personality-centered) hedges their bets amid fears of a rapid collapse and a social cohesion crack. How long this successful recipe can last? No one can answer this question because the reality is so complicated and the random factor is usually uncontrolled and even algorithm assessments are unable to end up in an answer with a tolerable verification probability.
We will be in touch soon. Until then, have a good time for the rest of the summer!