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The world is about to enter a new era, as evidenced by an analysis by Deutsche Bank experts, Digi24 reports. The phenomenon of globalization, which has generated the rapid economic growth of the last 40 years, will end and the new era will be characterized by a stage of accentuated “disorder”.
Deutsche Bank analysts argue that 2020 will be the beginning of a new structural supercycle. Such events “shape everything from savings to asset prices to politics and our way of life.”
The team, led by Jim Reid, predicts an “Age of Disorder” that is accelerated, but not produced, by the new coronavirus. This new era will usher in the collapse of global assets and rising debt at the government and corporate level.
Regarding the geopolitical situation, the tensions between the US and China will be characteristic of the period of unrest, as China continues on its way to restore its historical role of massive economic power, maintaining its own values, different from those of the West. . .
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“A clash of cultures and interests is approaching, as China approaches the time when it will once again become the world’s largest economy,” the report said.
The Age of Disorder: More specifically, the next ten years could also be an opportunity for Europe to become a great power and become even stronger through integration or to the point where its contradictions become too strong.
The eight themes that will characterize the “Age of Disorder” are:
- Deterioration of Sino-US Relations and Reversal of Globalization Trends
- The crucial decade for Europe
- A period dominated by deficits and debts
- Inflation or deflation?
- An increase in inequality followed by an adverse reaction that reverses the trend
- The gap between generations will widen
- Climate debate
- Tech Revolution or Tech Bubbles?
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The generation of millennials, young people between 22 and 38 years old, will be the ones who will count more and more in the economy and will be the most influential in matters of political decision.
Deutsche Bank experts assure that this generational segment has accumulated a series of serious frustrations in recent years and in terms of political developments, such as the election of Donald Trump as president of the United States or the vote for Brexit in the United Kingdom, but also in what regards the economic ones.
Millennials would try to shift the balance of power toward stricter property, income, and business taxes and a more pronounced intergenerational redistribution of wealth. The “new” generation could also be more tolerant of inflation, as the devaluation of money will erode the burden of debt inherited by the new generation, shifting the burden of paying these debts to bondholders who tend to be quite the same. part of the oldest and richest generation.
“The era of globalization to which we are probably saying goodbye has seen the best combined rise in asset prices at any time in history, with very strong returns on stocks and bonds in general. The” Age of Disorder “in Instead, it threatens the current high global values, not through a fall in prices but “through a reduction in their prices, especially in real terms”, through inflation, concludes Deutsche Bank.
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