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"I wish you to live interesting times". This expression, which seems a blessing, contains in reality a poisoned irony. Interesting periods are often fraught with conflict, instability and danger.
Who can doubt that we are experiencing interesting moments? What's more interesting than the press conference in Helsinki, during which President Donald Trump told the world that he trusted Vladimir Putin more than his own intelligence services. . They insist that they have definitive proof that the Russian government has been ingested in the 2016 presidential elections. But Putin told Trump that he was not going there. and that the President of the United States believed him. For a few hours The repudiation of Trump's behavior was so intense and widespread that he had no choice but to retract, in his own way. The next day, he invited Putin to a second meeting in Washington DC
At the same time as all this was happening, two short stories were published which, despite a wider distribution, will have enormous consequences for Russia, the United States and the United States. United between the two. The first is that Wood Mackenzie, a respected energy analysis company, predicted that global oil demand will reach its all-time high in just 18 years, much earlier than expected. The company ensures that the "tectonic changes" in the transport sector, especially the massive use of electric and autonomous vehicles much more efficient in their energy consumption, will lead to a "peak" of Crude oil demand in 2036. year, the world's appetite for oil will begin to decline. Hydrocarbons will not disappear as a source of energy, but their importance will diminish more rapidly than the experts expected. What does this news have to do with the meeting in Helsinki? Well, Russia is an oil state, a country whose economy depends mainly on oil and gas exports. Putin has failed to diversify the economy and reduce his country's dependence on hydrocarbons. Thus, a decline in global demand for its main export product will have a strong negative impact on the lives of Russians. Obviously, even in dictatorships, the deterioration of the economic situation has adverse and unpredictable political consequences.
The second news is the alert launched by the Institute of International Finance, a Washington-based private organization that collects and analyzes information on the health of the global economy. According to the IFI, the world is suffering from a serious overdose of debt. Global debt has risen at a rapid pace and is reaching volumes never seen before. In 2003, the volume of accumulated debt accounted for 248% of the size of the global economy. Today, it reaches 318%.
The indebtedness of a person, a company or a country is not problematic if he has the income to pay interest. Or there is someone who lends the necessary funds to do it. But if the income is not enough to cover the interest due, or if the borrowers lose confidence in the ability of their borrowers to pay, then they will stop lending. And try, however, to recover what they need. This is how financial crises are born
Does this mean that we are on the brink of another serious financial crisis like the 2008 one? Not necessarily. The global financial system is stronger and better regulated today. High indebtedness can be maintained without becoming a crisis, provided that the world economy develops and thus generates the revenues needed to service the debt. The concern is that global economic growth, which had recovered, could be slowed by the trade war that Donald Trump unleashed.
Laurence Fink, the leader of BlackRock the largest investment fund manager We just warned that the increase in customs duties on imports imposed by the White House as well as the trade retaliation that the countries affected by these decisions have taken, would affect economic growth and the stock markets would fall. The same thing was said by Jerome Powell, the governor of the Federal Reserve.
One lesson of the 2008 crisis is that the economic diseases of one country infect others at high speed. So, what happens to the US economy will shake the rest of the world and, of course, also Russia. This will naturally affect relations between the two countries. Another lesson is that economic crises divert political problems, while political instability diverts attention from economic difficulties. And that happens now.
It is not risky to predict that even more interesting times are coming
Twitter @moisesnaim
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