The summer is marked by the effects of the recession, the war in Ukraine and the health crisis.
With each new interview on Bloomberg or another somewhat serious channel, the word recession is now pronounced in a more relaxed manner. Everyone even seems finally relieved, without saying it so directly. At least that seems to put an end to the suspense, and thus sailing towards a small precipice, certainly, but considered a necessary evil, allowing a return to a form of normality, a new race forward, constitutes in the end a relief.
Since this mad cavalcade initiated by the terrifying management of the Covid crisis in many mainly Western countries, our fate has been sealed for this decade. The effects are just crazy and we discover them a little more every day. The arrival of the Ukrainian crisis, as a funereal “dessert” completed this insane sequence.
However in the rich countries, since in the end our privileged economies have nothing to do with the poor and the weakest, there does not seem to be any fear of this recession. The richest, countries or individuals, will come out of it. The majority analysis is that the most “average” of our “social classes” will ultimately not come out so badly. Savings never seen in 100 years, a number of jobs available beyond what is reasonable in the economic sense of the term (full employment is a source of danger for growth and a source of inflation). As a result, no guilt, “they” will be fine too. Economics hates uncertainty. Up or down? No matter ! We can win in these 2 cases. But not knowing the direction of the wind removes any notion of direction from investment and takes away the prospect of profit. So if it’s going to be a recession, whatever, let’s go!
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The summer will make it possible to measure the effects of the damage caused by the management of the Covid, as it was practiced by France, Italy, Australia, Singapore, Canada… and of which we are now experiencing all the horror .
Impact on young professionals, impact on teenagers. Their common point? A rate of depression, demotivation never reached, a rate of suicide and despair never reached in a traceable history. We have now, as indicated by the very recent study by Technologia (commissioned by Malakoff-Humanis), delivered an entire generation of young executives to chronic, heavy, fairly irreversible depression, who no longer wish or no longer want to work, which will penalize our economies in job strain due to the departure of the boomers, and destabilize our companies, which will have to run on one foot.
Impact on women, between those who have still not found either employment or independence, and those who will have been handed over to their executioners in general indifference.
Impact on the most vulnerable, these more than 150 million who have fallen back below the extreme poverty line.
We have (see The Economist article earlier this week) condemned a whole generation of young children to serious educational delay, in addition to mental health trauma. Schools have been closed for an average of 29 weeks in Europe, 63 in Latin America, and to date more than 153 million children have missed more than half of their physical education during this period. “Thanks” to this lamentable management of and by fear, the proportion of children who cannot read or write has gone from 57% in 2019 to 70% today. The shortfall is estimated, in the long term, at several trillion dollars. Such predictable madness. To protect a few hospitals and less than 1% of the population, we have sacrificed the other 99% and the entire global supply chain, which pays us in overinflation, in return.
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On the economic side, in an almost lighter way, this terrifying management added to that of the crisis in Ukraine, which could easily be stopped, but which clashes with the ego of politicians and the appetites whetted by the money that so many earn thanks its extension, particularly in the camp of the “defenders” of Ukraine. Even its President who sees in the perspective of a 750 billion reconstruction of his country, an opportunity to appear again in a few years in the Panama Papers!
We are therefore going to witness various first elements giving a precise idea of what it costs to play Doctor Jekyll:
Our debt, a large part of which is indexed to inflation, will cost France 15 billion more this year, which we absolutely cannot afford. And that’s just the beginning. Italy are cracking under the pressure as well.
Vacationers who take their car to go on vacation will have the option of canceling or going less far. We eat less, to compensate for the rising cost of gasoline, which makes the fortune of the oil companies and above all of the traders, and in particular the Indians, who buy at low prices from Russia and resell it to us at a very high price, so that we can continue to claim to have found an alternative to Putin’s Russia.
We’ll all come to resorts that don’t have a clue where to find a waiter available to serve you. There is still a shortage of at least 100,000 people in this industry in France alone, men who will never come back to it.
We will have to pay 20 to 30% more for almost everything that can be bought in the summer, including products that no one knew were made in Ukraine, as the number of profiteers from the crisis has spread lately, blaming the conflict for the increase in the cost of products that have absolutely nothing to do with the war.
The number of companies unable to pay their EMPs is increasing every day, and the threat of liquidation of thousands of SMEs, as expected, looms a predictable carnage, that the tension of the labor market and the good health of the consumption, camouflages more and more badly. The colossal savings created by the management of the Covid, allows the economies to hold, including in the USA, but it will only have time.
For the sake of the anecdote, this threat of recession, the volatility of the prices of technological stocks, which are particularly sensitive to the variation in rates, caused Twitter to miss the sale of its life. A valuation that made no sense, except for a man like Musk, who only assigns relative value to money and fortune, he always ran on instinct and passion, and Twitter was a personal fight that he wanted to afford whatever the cost. But reason finally prevailed. The fall in the price of its shares, the impact of the acquisition of Twitter on the price of Tesla, the amounts given as guarantees, have been right in its desire to afford an instrument to serve its conception of “free -speech”.
Everything is therefore for the best in the best of all possible worlds, as our friend Candide would say. It’s time to re-read your classics, they are always at the same price!