BlackRock has figured out what will be the defining parameter for the markets in the next three years. Not surprisingly, bitcoin has led to all of these issues.
BlackRock is forecasting inflation
Here is the tweet in question and its French translation:
“Russia’s invasion of Ukraine looks set to strengthen the reorganization of the world economy, including the acceleration of fragmentation. What is the most important trend for investing in the next three years? »
- Supply chain fragmentation?
- Fragmentation of energy markets?
- Decline in the share of the dollar in foreign exchange reserves?
- Fragmented geopolitics?
Supply chain fragmentation refers to a shortage of certain critical parts that no longer go to factories for x reasons.
In the case of war, for example. If the tone continues to rise above Ukraine, we will no longer receive Russian oil and gas, let alone the rest, such as nickel, which is essential in industry and of which Russia is the world’s largest exporter.
It is noteworthy that the EU intends to do without Russia’s energy as long as the consequences are known in advance. Which suggests, by the way, that they are trying to make a Major Hyper-Inflation Reset…
Only Iran would enter the fray by closing the Strait of Hormuz. Blocking a third of the world’s oil exports would quickly push the barrel to levels that would destroy entire parts of the economy.
Closing a port can harm global logistics. It’s been a Chinese specialty for a year, and it’s a reason to fight covid. Hundreds of boats are currently staying out of Shanghai, leading to a slowdown in production. This results in a reduction in supply which further increases inflation.
Cyber-attacks can also disrupt the supply chain. For example, all you have to do is hack the controls on board a tanker to land in the Suez Canal …
Upon closer inspection, all the issues outlined by BlackRock are linked.
Fragmentation of the energy market will result from the proxi war waged by the United States and its European vassal in Ukraine. The attacker is not always guilty. NATO is equally responsible for what is happening in the Donbass as trying to settle Russia ‘s border despite long – standing warnings.
The decline in the use of the dollar as an international reserve currency would be a direct result of this new cold war with Russia, China and Iran, among other things. Sixty percent of foreign exchange reserves are held in dollars, including 14% (1000 billion) by China. Freeze so much money in case of invasion of Taiwan…
If China decides to emulate Russia by rejecting the dollar, the latter will fall apart due to the chronic deficit of US trade balance with the Middle Kingdom. Americans will be forced to pay more for Chinese goods and once again we return to inflation, which is the final adjustment variable.
Europe will not be saved. Ten additional European gas buyers opened accounts with Gazprombank, doubling the total number of customers willing to pay in Rubles for Russian gas. As a result, the euro is at its lowest level since 2020 against the Ruble, and for 20 years against the US dollar. Even German companies worn in the towel.
It is indeed impossible to find the equivalent of Russian energy production anywhere else. No country can replace Russian gas, let alone its oil. Why? For the simple reason that we crossed the peak of traditional oil in 2007.
In addition, the subprime crisis (a barrel of oil at $ 150 at the time) was precisely driven by the energy shortage. The world has been able to break the rut thanks to American Shale oil, but it seems to have already peaked in 2019.
In other words, the Russian oil taken from the market will not find anywhere else. So the pressure on prices is great because oil sustains our entire civilization. You need it for almost everything and it is no coincidence that the Russian bear chose this crucial time to come out of its nest full of confidence.
Eventually, countries that lack energy will decline and will not be able to repay their huge debts. Current events are not very lucky. They are just a logical continuation of the productive decline of the West on the one hand, the catching up of Chinese technology on the other, and finally, peak oil.
The billions that the ECB prints every month do not mean that coffers are empty because we no longer have enough cheap energy to produce what would be needed to stabilize the debt – to – GDP ratio. Trees do not rise to the sky. Sooner or later everything comes back into balance. The balancing mechanism is euro inflation and depreciation.
Inflation will remain high, no matter what the ECB does. Suddenly oil will not run out in France due to rising rates. Unemployment will be caused by the credit crunch. The stock market, debt securities and real estate will decline. View Nasdaq values:
- Netflix -72% = worst year ever
- Facebook -44% = worst year on record
- Amazon -37% = worst year since subprime crisis (2008)
- Tesla -30% = worst year on record
- Microsoft -22% = worst year since subprime crisis
- Google -21% = worst year since subprime crisis
- Apple -17% = worst year since the subprime crisis
- Nasdaq: -28%
Inflation is what BlackRock talks about in his tweet. Brewing is in a huge recession. There will be no investment opportunities for three years. Finally yes, bitcoin, the most liquid asset, is the rarest. The currency that will replace the dollar as a stateless international reserve currency.
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Journalist reporting on the Bitcoin revolution. My papers deal with bitcoin through geopolitical, economic and libertarian prisms.