With already high (if not unsustainable) levels of public ****debt in many countries, policies to deal with the epidemic crisis have meant a significant increase in fiscal deficits - equivalent to 10% of GDP or more. To make matters worse, the decline in incomes of many households and firms means that private sector debt levels will also become unsustainable, potentially leading to massive defaults and bankruptcies. Combined with soaring public **** debt levels, all of this will only make the recovery even more sluggish compared to the period following the Great Recession 10 years ago.
②The demographic time bomb in developed economies: aging
The epidemic crisis has demonstrated the need for more public **** spending to be allocated to the health system and for universal healthcare and other related public **** products to be a necessity, not a luxury. However, as most developed countries are facing an aging crisis, future funding of such expenditures, if any, will further expand the hidden debt of currently unfunded health and social security systems.
3) Growing risk of deflation
In addition to causing a severe recession, the crisis has created massive idleness of goods, mass unemployment of people, and plummeting prices of commodities such as oil and industrial metals. This has made a debt crunch possible and increased the risk of insolvency.
4 Currency devaluation
Monetary policy will become more unconventional and far-reaching as central banks try to fight deflation and guard against the risk of soaring interest rates (and consequent massive debt accumulation). In the short run, governments will need to monetize their fiscal deficits to avoid depression and deflation. Over time, however, permanent negative supply shocks from accelerated de-globalization and neo-protectionism will make stagflation almost inevitable.
5 Wider economic disruptions due to digitization
The income and wealth gaps in 21st century economies will widen further as millions of people lose their jobs or work and earn less. To guard against future supply chain shocks, firms in advanced economies will shift production from low-cost regions to higher-cost domestic markets. But rather than helping workers at home, this trend will accelerate the pace of automation, put downward pressure on wages, and further fuel populism, nationalism and xenophobia.
6 De-globalization
The epidemic is accelerating the trend toward balkanization and fragmentation already underway. Most countries will adopt more protectionist policies to protect domestic businesses and workers from global economic turmoil. The post-epidemic world will be marked by tighter restrictions on the flow of goods, services, capital, labor, technology, data, and information. This is already happening in the pharmaceutical, medical device and food industries, where governments are imposing export restrictions and other protectionist measures in response to the crisis.
7 Weak Economy Leads to Rising Populism
Populist leaders often benefit from a weak economy, mass unemployment and rising inequality. With increased economic insecurity, there will be a strong tendency to blame foreign countries for the crisis. Blue-collar workers and broader middle-class groups will be more susceptible to populist rhetoric, especially proposals to restrict immigration and trade.
8 Geostrategic stalemate
One of the worse scenarios in the aftermath of the epidemic is that diplomatic divisions will set the stage for a new Cold War between the United States and its adversaries. As the U.S. presidential election approaches, there is every reason to expect a significant increase in covert cyber warfare. As technology is a key weapon in controlling future industries and fighting pandemics, the private U.S. science and technology sector will become increasingly integrated into the national security and industrial complex.
9 Environmental Disruption
As the epidemic crisis has shown, environmental disruption can be far more damaging to the economy than the financial crisis
Recurring pandemics, like climate change, are essentially man-made disasters, stemming from low standards of hygiene and sanitation, the misuse of natural systems, and the increasing interconnectedness of a globalized world. In the coming years, many of the pathological symptoms of epidemics and climate change will become more frequent, severe and costly.
Economist Nouriel Roubini warned that these nine risks were looming before the epidemic struck, and now have the potential to trigger a perfect storm that could drag the entire global economy into a decade of despair. In another decade, when the clock ticks into 2030, technology and more capable political leaders may be able to reduce, resolve or minimize these problems, resulting in a more inclusive, cooperative and stable international order. But the prerequisite for realizing any happy ending is that we find a way to ride out the coming Great Depression.
If the global economy does enter a prolonged depression, as Nouriel Roubini predicts!
This would certainly be a major negative for financial markets. In this case, it may be more appropriate for investors to opt for a relatively cautious strategy. Recent gold ETF positions are still continuing to increase, the world's largest gold ETF - SPDR's position last week hit a new high since May 2013, which implies that medium- and long-term investors still favor to increase the allocation of gold assets, is expected to give support to the price of gold in the medium and long term, may also make the short-term downside of the price of gold space Be limited.