Andn scrutinizing the catastrophes that could occur, it is not a black swan that appears, but a flight of gyrfalcons. Everywhere, bad news, one wonders if they mark the advent of a great regression. The prosperity reaped by the fall of the Berlin Wall rested on three pillars: the dividends of peace; a laboratory China that supplied the planet at low cost; cheap and inexhaustible energy with shale gas. These favorable conditions contained inflation and allowed many Western countries to live on triple credit: from China, the planet and the markets. Is this globalization definitively called into question? Too early to tell, but nothing will ever be the same again if one of the following three major breakdowns occurs.
The first danger concerns the use of nuclear weapons. Vladimir Putin never stops wielding the threat of this, and dictators generally have a fault: they do what they announce. The threat is not taken seriously enough: the more the Russian president is in dire straits, the more he risks doing irreparable harm.
The second argument concerns China. The invasion of Taiwan, or even its simple blockade, and the break with Beijing that it would entail, would be of a completely different kind compared to the conflict with Russia, which has deprived Europeans only of natural gas, not even of oil. It is a more widespread but equally dangerous risk, as Xi Jinping is expected to strengthen his dictatorship at the head of the country during the Chinese Communist Party (CCP) congress.
The second largest economy in the world is doing badly economically, and the CCP’s pact with the Chinese people – we assure you prosperity, but you have no political freedom – cannot be sustainable if the first part of the contract is broken. . Nobody knows what a troubled China would mean.
Third risk, a serious financial accident. The “whatever it takes” decided at the height of the Covid-19 epidemic has a name, inflation. To counter it, the Federal Reserve (Fed) relentlessly raises its rates. The effect is harsh in the United States, but it risks being unbearable outside their borders, where the phenomenon is combined with a surge in the dollar. Everyone fears an accident comparable to the bankruptcy of Lehman Brothers, which brought down the financial world in 2008, or the bankruptcy of Mexico in 1982. The disaster can come from a bank – Crédit Suisse used to say – or from a country, such as the route of the pound after the UK stimulus package showed.
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