Economic and social destabilisation will continue this year

Seven plagues that will hit the world in 2023

photo_camera AP/MICHAEL SOHN - Pipelines of the Nord Stream 2 pipeline landing facility in Lubmin, northern Germany

If 2022 was a year in which we lived dangerously (war in Ukraine, soaring inflation, collapse of cryptocurrencies and earthquakes in the stock markets), 2023 comes loaded with uncertainties, poisoned legacies of the past and unresolved threats. Inflation, the energy crisis, the danger of recession in the world's largest economy and uncertainties surrounding oil and the dollar are the main unknowns of a year that anticipates a continuation of the scenario of suffering. 

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The year continues the fight against the seven plagues that have destabilised the world.

  • The end of inflation is far from in sight. After a period when prices appear to have moderated, CPI will return to the 8-12% range, where Michael Wilkerson in The Epoch Times says it will remain for the rest of the year. It is going to be cost-driven inflation, not demand-driven. 
  • Fighting price growth, without stagnating the economy. Brandon Smith, in Alt-Market.us warns of the risk of rate hikes for the future of the economy and offers this prescription: "What if states gave incentives to local producers (such as tax breaks) to manufacture high-quality durable goods? 
  • The risk of recession in the US. "The first half of 2023 is likely to be characterised by negative GDP, rising unemployment and an insecure consumer. The wave of layoffs that began in the tech sector in 2022 spreads to other industries and sectors, migrating from large-cap corporations such as Meta and Amazon to small and medium-sized businesses," warns Wilkerson. 
  • The economy is in a liquidity crisis. Says guru James Rickards in DailyReckoning.com, when he says that these always start with the failure of a major institution (bank, fund or commodity trader), which gives way to a contagion effect to other sectors. He warns that recession and financial crisis now coincide, as in 2008, threatening 50% falls in stocks. 
  • Worsening energy crisis in Europe. "Germany, the EU's largest economy, made a Faustian bargain believing it could abandon its coal industry and any nuclear aspirations and instead put its faith in the Russians, against all historical experience, and in a green utopia. France also turned away from its path to energy independence, nuclear power, and is paying the price. While both have recently repented of these errors of judgement, the road to recovery will take years, not months," Wilkerson asserts in The Epoch Times. 
  • Oil and geostrategic moves. The upward trend in oil prices is set to continue, due to incessant supply disruptions and refinery constraints. 
  • Harassment of the dollar's supremacy in the payments circuit. On a recent trip to Saudi Arabia, Chinese President Xi Jinping brokered an agreement that all Chinese oil sales will be settled in yuan rather than dollars, as had been the case until the outbreak of war in Ukraine. Russia reacted to the sanctions by forcing all Russian oil purchases to be paid for in roubles. The dollar has found a powerful rival in the BRICS group (Brazil, Russia, India, China and South Africa). 

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