The Global Economy In 2023 Is A Ticking Time Bomb! Here Are 5 Triggers For The “Next” Crash!

Photo by Sven Verweij On Unsplash

Happy New Year, folks! 2023 has just started, and “experts” are already warning of the next crash that can set off the global economy, which now resembles a ticking time bomb. There are many “triggers”, and I present Five of them most likely to “spark” a global economic and financial crisis. Mind you; I am using both economic and financial as unlike the crash of 2008, the coming storm is broad-based, affecting multiple sectors of the global economy. The possible causes range from the Ukrainian war, China’s “botched” Zero Covid Lockdowns and its subsequent “hasty” reopening, rising income and wealth inequality pushing those at the lower rungs into delinquency and worse, the possibility of the “resurgence” of the Coronavirus, and last, but perhaps the most “potent”, the ongoing Big Tech meltdown and the Crypto “winter” which can quickly “spread” into the other wider economy.

First, the Ukrainian war. With Putin hellbent on victory and Zelensy, supported by the West, in no mood to oblige, there is every possibility that this conflict can end up in a “nuclear winter”. Already gas and wheat have been “weaponized”, and with more and more “mobilizations” planned, along with an “escalation”, 2023 can well be the “kaput” (German word for broken and the end) endgame with devastating consequences for inflation, brought on by supply chain bottlenecks and shortages of oil, gas, and food. Remember that Russia and Ukraine serve as the “wheat bowl” of the world, and the former is also among the world’s top exporters of oil and gas. You can then fathom how bad it would be for markets and the broader economy if the war drags on or ends up in a “winter from hell”.

Second, Xi seems to be emboldened by Putin, both of whom are also buddies and is flexing his muscles over Taiwan, which can easily spill over into a regional conflagration and possibly, end up with Biden’s direct involvement. Moreover, Xi seems to be using Taiwan as more of a bargaining “chip” (literally as well as figuratively since Biden has hit him with sanctions on China’s tech sector) as well as a “diversion” from his “problems”, primarily due to the “failing” real estate sector. Indeed, Xi does have his hands full with his quest for “immortality” after securing a record Third Term in office, along with reversing some of the legacy policies such as the One Child norm. However, both are unlikely to help him in any way. Some commentators have mused whether these are the “real” reasons for the abrupt reversal of the Zero Covid lockdowns, which became a “headache” for the global economy.

Third, one needs to remember that the Coronavirus never “went away” and that perhaps we have not learnt the “right” lessons. For instance, anti-vaxxers living in “denial”, along with “hasty” unlocking, are giving rise to newer variants, and the pandemic is just “around the corner”, what with the many “crons” of the mutations likely to bring about a Third Wave. Moreover, the pandemic has made us all “edgy” and feeling “blue” and “weird”, lowering productivity and leading to an exponential increase in “mental health” issues, especially among the Millennials and the Gen Zers. Indeed, the “angst” of this generation is showing up in diverse settings such as The Great Resignation and the anti-Hijab protests in Iran. Of course, the “reality check” here is that sooner or later, the “moment of truth” for the TikTok generation would arrive as someday they have to “settle down”. What is “worrying” is that if the pandemic does indeed make a “comeback”, the resultant “hopelessness” of an entire generation laid waste would have “serious” economic and financial repercussions.

Fourth, and perhaps the most “potent” of all “triggers”, is the ongoing Big Tech meltdown and the Crypto “winter” that can easily “knock” the global economy off course and set off a market crash. The tech layoffs, the Unicorn bubbles bursting, and the Cryptos crashing is causing economic and financial pain. If this continues well into 2023, a key segment, and something that economies worldwide have based themselves on as a “one pony trick”, would feel the “stress” of massive job losses and “declines” in incomes and wealth, leading to a full-blown tech-driven “recession”, much like the Dotcom crash of the early 2000s. In addition, if Megalomaniacal Oligarchs like Elon Musk continue to have their way, their “creative destruction” can end up with only destruction and nothing creative about it. Perhaps it is time for older and “wiser” tech pioneers like Bill Gates to step in and steady the sinking ship that Big Tech has become.

Last, and a trigger that is the direct consequence of the aforementioned ones is the rising income and wealth inequality which threatens to undo the gains of the middle class and those below it. Already inflation is “eating” into their savings. If layoffs start along with loans turning sour, the “next” crash can well be reminiscent of The Great Recession of 2008, which in turn was caused due to a combination of mortgage debt and risky speculation. Moreover, we are too “frazzled” by the events since 2020, and I really doubt if we have the wherewithal to “weather” another “BIG” market and economic crash. Indeed, we might be very well headed for The Great Derangement, as The Great Unraveling of the global economy continues in 2023, with the “gyrating” markets and the “race to the bottom” moves, leaving only The Top 1 Percent to survive.

So, here we are! As the first week of 2023 draws to a close, remember that this year can very well be the year of “reckoning” for the global economy, more and more resembling a ticking time bomb waiting to explode due to any of the 5 Triggers that I have listed. Enjoy the rest of your Sunday.


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