Recession at the gates


The global recession seems to be upon us now. For the global economy 2023 is likely to be the worst year since 2009. And, among Western countries, Britain appears to be the forerunner towards this nightmare scenario.

Nouriel Roubini, one of the few economists to have predicted the 2008 crisis has even upped the ante: according to the New York University professor, the recession that is about to arrive will be very bad, it could last for years and it will make families and businesses suffer a lot, while governments will not be in a position to introduce adequate tax concessions due to the lack of margins.

The data on the increase in expenses confirm the first signs of a storm. An example above all: in Germany, August producer prices rose 45.6% annually, while the cost ofenergy registered a increase of 20.4% on a monthly basis e of 139% on a trend basis. These are the highest increases ever recorded since the start of the statistical survey in 1949.

Old remedies

History, it is said, is a teacher of life: to face this impending storm we should learn from what has happened in the past, and possibly avoid the mistakes made.

But no: central banks behave as they did in 2008-09. That is, they just raise rates. While the few measures (EU and national) introduced in Europe against the high energy and crazy costs of gas prove to be ineffective and confused – with the exception of the cap introduced independently in Spain and Portugal.

In Spain and Portugal. Not in Italy, where tax credits were used to help companies pay their bills. It goes without saying that the measure is incomplete: it will help some companies and will exclude others, given that to enjoy a tax credit it is necessary to have profits. Paradoxically, the companies with the greatest need for support will be left out, as they will have to face the payment of bills increased by six to seven times without any help.

But if Rome cries, Brussels doesn’t laugh. The proposal of the gas price cap is standing on a desk because it does not find the unanimity of the member countries, nor is the decoupling of gas and energy tariffs taken for granted. The only certainty is that the next September 30, date on which the energy ministers will meet again, will be introduced rationing and limitations for the citizen. In the words of the Milanese singer-songwriter Walter Valdi, always me. That is: uncomfortable situations are regularly dumped on the consumer, who is ultimately forced to pay for others’ mistakes.

Calm air

In this unnatural calm, which seems so much the calm before the storm, one thing is clear: that the energy issue and its variables make the current situation potentially more serious than in 2008. With unforeseeable consequences: only a (probable) decline in GDP equal to 2.5% is equivalent to half a million fewer jobs. A real hot potato for anyone who wins the next election.

Meanwhile, it has passed virtually unnoticed violation of Armenian borders by Azerbaijani troops. This happened, among other things, a few hours after the gas supply agreement between the European Union and Azerbaijan.

This unequivocally confirms what was said at the beginning of the Ukrainian crisis: measures such as sanctions can be consistent with an idea of ​​peace, democracy and respect for international laws only if they are imposed on all countries that do not respect human rights. Indiscriminately. An impossible undertaking, given that the majority of those who supply us with raw materials certainly do not shine in this respect. The non-reaction of the EU to the Armenian-Azerbaijani crisis only confirms, once again, this inconsistency.

Federer, the end of an era

If the new crisis makes us go back 14 years, the announcement of Roger Federer, who announced his retirement from tennis after the Laver Cup, it takes us back to 2001 – the year in which the Basel champion won his first ATP tournament in Milan.

The beginning of the Federer era coincides with the years of Euromania: in 2002 the single currency was enthusiastically received in the four corners of Europe and in 2003 – the year in which the Rhenish tennis player won his first slam, on the friendly grass of Wimbledon – our currency was riding the wave of the great revaluation against the dollar. While the boom of Europeanism was growing, also favored by flights low cost and the growing exchange of experiences between citizens of the Union (especially young people).

Today, the euro is below par with the dollar, and even further below in relation to the Swiss franc, the economy has suffered a series of devastating crises and Euroscepticism is at its peak. Our continent has abandoned its role as an economic giant and has become impoverished, while the rest of the world has enriched itself.

Where did we go wrong? There was a complete lack of cohesion. We thought we were entering a new era, but unfortunately we have not developed the political and fiscal union that would prove necessary to compete with the United States and Far East.

The step was not taken, and this made the next phase impossible, namely the planning of a common public debt, a real shield against any possible attack on the euro and on our economic leadership.

Thirty years since Black Wednesday

There was talk of the first tournament won by Federer as a professional, in the shadow of the Visconti snake of Milan. A few years earlier, the Swiss tennis player while still a child had dominated another tournament, this time as a junior, under another Visconti snake, that of Bellinzona. It was the year 1992. That of Black Wednesday, which saw the lira and the pound sink under the blows of a speculative attack, and the 30th anniversary of which was recalled a few days ago.

The euro was not there yet and the EU countries had the possibility to devalue. However, Italy and Great Britain had been forced out of the EMS exchange system, with serious repercussions on the economy.

Black Wednesday represented the first bet against Italy by speculative finance – free, now as then, to bring entire economies to their knees.

Also in 1992, a few months earlier, the Italian government had inaugurated the season of privatization and divestment of the state assets. Since, the middle class has gradually shrunk. Today, for the first time in history, children are worse off than their parents, and children are no longer able to have a family, hunted by crisis, unemployment and dumping wage, also triggered by competition from growing foreign labor.

Oil, the great unknown

There is tranquility, however, on the front of the Petroleum, that it is depreciating. The trend is creating discontent in OPEC +: the producers, led by Saudi Arabia, are willing to stop the decline in prices.

It appears that the decrease in crude oil was influenced by an operation of theBiden administration, which ahead of the elections of mid termis resorting to strategic reserves to avoid gasoline price increases. For essentially electoral reasons.

After the renewal of the rooms – or in any case the exhaustion of the reserves – the United States will have to replenish the warehouse. And in that moment, the price of crude oil can be expected to rise again. Without the need for the intervention of OPEC +.

Instead, theoro. The trend is further proof of how confused the markets are today: the yellow metal no longer protects against inflation. The figure could also be conditioned by Russia’s sale of gold to finance the war in Ukraine.

The stock exchanges, for their part, are nervous and volatile for the new, possible rate hike in the United States, as well as for the looming crisis. For this, they are still defensive stocks are recommended, such as utility and oil. On the other hand, there is a red disc for industrial actions: on this front it is better to wait to understand how the storm-bills will be dealt with.

Il merge of Ethereum

Markets are suffering and cryptocurrencies are suffering, also affected by the new decline in technology stocks and the Nasdaq. Not even Ethereum escapes this descent, despite the great operation (the merge) which brought the virtual currency from polluting and energy-intensive proof of work at the most sustainable proof of stake.

For now, the choice has not rewarded the prices, keeping Ethereum in line with the others crypto. One day, however, this virtual uniform could reverse the general trend, rewarded by a choice in the name of sustainability.

In the future, the sale of Bitcoin and the simultaneous purchase of Ethereum could prove to be a far from remote strategy – for it to come true, however, some large investor needs to break the wait and pull the market towards this choice. A move that, of course, cannot be predicted at the moment.


Source: RSS DiariodelWeb.it Economia by www.diariodelweb.it.

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