In the case that the public debt level in many countries is already high (if not unsustainable), the policy to deal with the epidemic crisis means a substantial increase in the fiscal deficit-equivalent to 10% of GDP or even more. To make matters worse, the income of many families and companies has declined, which means that the debt level of the private sector will also become unsustainable, which may lead to large-scale default and bankruptcy. Coupled with the soaring level of public debt, all this will only make the economic recovery weaker than the period after the Great Depression 10 years ago.
② Population Time Bomb in Developed Economies: Aging Problem
The epidemic crisis shows that more public expenditure must be allocated to the health system, and universal medical care and other related public products are necessities, not luxuries. However, since most developed countries are facing the crisis of aging, providing funds for this kind of expenditure in the future will further expand the hidden debt of the medical and social security system without financial support at present.
③ The risk of deflation increases.
The crisis not only caused a serious economic recession, but also caused a large number of goods to be idle, people to be unemployed on a large scale, and the prices of commodities such as oil and industrial metals plummeted. This makes it possible to tighten debts and increases the risk of bankruptcy.
④ Currency devaluation
With the central bank's efforts to fight deflation and prevent the risk of soaring interest rates (followed by massive debt accumulation), monetary policy will become more unconventional and far-reaching. In the short term, the government needs to monetize the fiscal deficit to avoid depression and deflation. However, with the passage of time, the permanent negative supply shock brought by accelerating de-globalization and new protectionism will make stagflation almost inevitable.
⑤ Digitalization causes wider interference to the economy.
As millions of people lose their jobs and their incomes decrease, the gap between income and wealth in the 2 1 century economy will further widen. In order to prevent future supply chain shocks, enterprises in developed economies will shift their production from low-cost areas to higher-cost domestic markets. However, instead of helping domestic workers, this trend will accelerate the pace of automation, bring downward pressure on wages, and further encourage populism, nationalism and xenophobia.
6. De-globalization
The epidemic is accelerating the separatist regime and division that has already begun. Most countries will adopt more protectionist policies to protect domestic enterprises and workers from the global economic turmoil. The post-epidemic era will be characterized by stricter restrictions on the flow of goods, services, capital, labor, technology, data and information. This happened in the pharmaceutical, medical equipment and food industries, and the governments of these industries are implementing export restrictions and other protectionist measures to deal with the crisis.
⑦ Economic weakness leads to the rise of populism.
Populist leaders often benefit from economic weakness, mass unemployment and rising inequality. With the increasingly insecure economy, people will be strongly inclined to blame foreign countries for the crisis. Blue-collar workers and the middle class will be more susceptible to populist rhetoric, especially proposals to restrict immigration and trade.
8 Geostrategic deadlock
Even worse after the epidemic, diplomatic division will pave the way for a new cold war between the United States and its opponents. With the approaching of the US presidential election, we have every reason to expect that secret cyber warfare will increase dramatically. Because technology is the key weapon to control future industries and fight against epidemics, the private science and technology sector in the United States is increasingly integrated into the complex of national security and industry.
Pet-name ruby environmental damage
As the epidemic crisis shows, the damage caused by environmental damage to the economy may be far greater than the financial crisis.
Like climate change, recurrent epidemics are essentially man-made disasters, which are caused by low health and hygiene standards, abuse of natural systems and increasing interconnection in a globalized world. In the next few years, many pathological symptoms of epidemic diseases and climate change will become more frequent, serious and costly.
Economist Nouriel Roubini warned that these nine risks were imminent before they broke out, and now they may trigger a perfect storm, dragging the whole global economy into a decade of despair. In another 10 year, by 2030, political leaders with stronger skills and abilities may be able to reduce, solve or minimize these problems, thus creating a more inclusive, cooperative and stable international order. But the premise of any happy ending is that we find a way to get through the coming Great Depression.
If the global economy really enters the long-term Great Depression as predicted by Nouriel Roubini!
This is undoubtedly a major negative factor for the financial market. In this case, it may be more appropriate for investors to choose a relatively cautious strategy. Recently, the positions of gold ETFs have continued to increase. ETF——SPDR ETF, the world's largest gold ETF, hit a new high of 20 13 last week, suggesting that medium and long-term investors still tend to increase the allocation of gold assets, which is expected to provide medium and long-term support for gold prices, and may also limit the short-term downside of gold prices.