Should we forget this first half of 2022?  - Trends-Trends on PC

Should we forget this first half of 2022? – Trends-Trends on PC

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Is the first semester that has just ended to be forgotten? Good question, to which I will give you an answer from Normand. Yes and no. Yes if we look at the economy brutally: inflation is very much on the rise and at levels not seen for decades, the economy is slowing down when it was supposed to explode after the end of the covid measures, Europe and the US is afraid of falling into recession, interest rates are rising rapidly and stock market bubbles have burst.

Is the first semester that has just ended to be forgotten? Good question, to which I will give you an answer from Normand. Yes and no. Yes if we look at the economy brutally: inflation is very much on the rise and at levels not seen for decades, the economy is slowing down when it was supposed to explode after the end of the covid measures, Europe and the US is afraid of falling into recession, interest rates are rising rapidly and stock market bubbles have burst. The proof of this last point? The S&P 500, the main index of the American Stock Exchange is at -20% since the beginning of the year. The Nasdaq, the Technology Stock Exchange, is at -29. The bitcoin, which made the crowds fantasize, is at -60%. Tesla is at -33%. And even Amazon, which had benefited from the boom in e-commerce with containment, is also at -34%. Incidentally, these figures in dark red prove that Jean-Luc Mélenchon and Oxfam are on the wrong target when they castigate capitalism which, according to them, creates billionaires every hour. The simple reading of this first half of 2022 shows that this same capitalism can reduce in a few days or a few weeks by a good third, or even more, the wealth of these same billionaires. But of that, neither Mélenchon nor Oxfam talk about it. Now, let’s see why, on the contrary, we must remember this first half of 2022. First, because apart from – perhaps – the war in Ukraine, everything negative that happened to us was unfortunately predictable. We have to remember that because for months, if not years, some had been crying daredevils at these baseless stock market valuations, except that the money was free and there was no no alternative to the stock market. As banker and essayist Marc Fiorentino nicely writes in his newsletter, investors have seen “pink skies and elephants flying.” But now, these same stock market investors are in panic mode, “it’s the classic phenomenon of lack after a long period of addiction”. In other words, we are in a period of withdrawal since the chief dealers that are the central banks have stopped distributing their coke. Because free interest rates are over. Besides, let’s face it, no longer having negative interest rates is not a tragedy but on the contrary a return to the normal, healthier, more logical world. Last week, central bankers gathered in Portugal for a forum admitted that they did not see inflation coming. Like mea culpa, it’s terrible, right? Yet inflation was there, visible even before the invasion of Ukraine. Then, when these same central bankers saw it coming, they tried to reassure us by telling us and repeating that it was temporary. In short, that the price rise was just a momentary bump on a chart. Except that the temporary inflation (the bump) seems to be here to stay. And that, these brilliant central bankers had not foreseen. Modestly, I think you really have to remember this first half of 2022. Because later, when someone tells you about a new world, a new paradigm, you can shrug your shoulders. And tell him that you were there when the old world came back to our fond memories. When this old world swept away the new in less than six months. In reality, it couldn’t go on like this and both covid and inflation came and sneezed it in our face.

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