July 14, 2024

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Global Anxiety: What Will It Be…Crisis After Crisis?

Global Anxiety: What Will It Be…Crisis After Crisis?

In Europe the problem is recognized in German banks, the car industry and Nordic banks.

In one of the most beloved films of the ’90s, Groundhog Day, its hero, a TV weatherman, played uniquely by Bill Murray, mysteriously begins living the same day over and over again.

This is exactly what the whole world thinks has been happening to him since 2008 until now. Because when the financial crisis began with the collapse of Lehman Brothers, which took over Europe and increased it, especially its south with large debts, everyone relied on the often expressed belief of analysts that all crises have a 10-year horizon.

Indeed, 10 years have passed, and as Brexit was seen as a world-altering change, the coronavirus pandemic suddenly came to upend everything that had been taken for granted until that point, from public life to everyday life in citizens’ homes.

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The return to normal life, so much touted at the height of the health crisis, never really happened, because before the world was informed that the current murderous rampage, from the killing of women to the many incidents of child abuse, is the predictable result of a pandemic, a war Russia in Ukraine and the whole world cheered… My dear life.

The recent turmoil in the financial industry, with the collapse of banks, such as Silicon Valley, on the other side of the Atlantic and the consulate between Credit Suisse of Switzerland and UBS with the aim of saving the first, no longer surprised anyone, only frightened everyone more than that this well has no bottom. So what is the next crisis on top of the crisis, as described by the head of the International Monetary Fund, Kristalina Georgieva?

As the think tank notes ValdaiClubIf the initial crisis of 2008 proves anything, it’s that anything can start to go wrong from an unpredictable event. So, more specifically, the question that needs an immediate answer is, what unexpected event could trigger a new global crisis?

… purple loans

For now, economists are betting on loans that are red, turning violet again, amid soaring inflation, sharp interest rate increases, and generally weak growth.

Of particular concern are commercial real estate loans, that is, real estate for commercial use, which is of more interest to the United States than to Europe. When asked to comment on all these rumors about a future US recession, JPMorgan’s Greek-born CEO, Jamie Dimon, estimated recently in CNN And although the banking sector is strong and stable, the unrest in its circles is “another weight in the balance” towards recession.

“We’re seeing people slightly cut back on borrowing, cut back on spending slightly, and withdraw their money slightly,” he told the US network. “While banking chaos won’t lead to a recession, it does save and, well, it is a recession,” he concluded.

It’s time for Germany

In Europe, the problem is recognized in the banks of Germany and Scandinavia. As he wrote last month in New country state Wolfgang Menschau notes, “Financial crises never happen in quite the same way” — meaning that Greece is out of the equation — but a debt crisis can erupt “at the point where state-owned banks, legacy industries, and governments who are fighting so hard to protect their economic model come into contact.”

He pointed to the German auto industry, which is trying to transition into the world of electrification and artificial intelligence at a time when the financial exposure to the sector is huge.

Not to mention the US debt (a situation that will show its potentially destructive potential over the summer), the geopolitical risks of declining power in the West, China’s step forward in the international arena, and the growing importance of the Middle East and North. Africa for old and emerging powers, and obviously endless interest rate increases, at least for the time being, are also potential trigger points for another massive crisis on top of previous ones.

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