• Jaume Torres

Welcome to the age of uncertainty.

Spring is finally here, and the intense first quarter of 2022 is over.





After a somewhat abrupt end to 2021 that already presaged a downward correction of the most optimistic economic forecasts. The war that broke out in Europe at the end of February increased the pressure on inflation with a sustained, generalized increase in the price of raw materials, particularly oil and gas. The first quarter data on inflation reveal figures that take us back to the 1980s in Europe (Germany 7.6% and Spain 9.8%). In Switzerland, however, this rate is just over 2%. The war has also increased pressure on grain and wheat prices, which could lead to tensions in North Africa, as prices are already at the same level as those that triggered the Arab Spring years ago. If it happens again, this time the migratory pressure on Europe could come from two fronts at once, Ukraine and the Maghreb. All this causes the various economic sectors to move in different directions, confirming the K. The gap caused by the coronavirus in the business situation is now widening again; for sectors in which the business situation was already more favorable than average, the trend is on the upswing. On the other hand, recovery will have to wait in those sectors where the business situation was already somewhat below average, i.e. other services, retail and hospitality. As if that were not enough, returning to the geopolitical scenario, it seems that the EU will have to rethink not only the purchase of raw materials from Russia but also the scope of collaboration with Beijing at the cost of putting Chinese trade, investment and tourists at risk, all of which opens up a multipolar scenario that is difficult to define today. It seems that the economy will not be able to disassociate itself from politics for some time.


As for the new economy, I don't know why we keep calling it "new," if it is really already here. The deep technology sectors, known as the DARQ (distributed accounting technologies, artificial intelligence, extended reality and quantum computing) sectors, have an almost unlimited commercial potential and will become even stronger in the medium term, leading the transformation of our society. Looking specifically at the crypto economy today, it seems that the market has contracted after an out-of-the-ordinary boom of NFTs, and it seems that all those projects that are exclusively speculative and do not provide value are going to be left out, similar to what just happened with Official Credit Institutes in 2018. On the other hand, tokenization is consolidating in the luxury, fashion and art sectors, bringing new layers to the shopping experience and to the collection of specialty items. Bitcoin's staunchest supporters across the board have continued to accumulate without interruption during this quarter as the market has consolidated, with a general bearish sentiment, through the end of March, but that could now change; the beginning of an armed conflict is almost always a good time to buy stocks, including crypto assets, and to take advantage of sharp corrections triggered by fear. It seems that this will turn out to have been the case this time as well. In the meantime DeFi, or decentralized finance, the incipient regulation of the sector and the growing tokenization of the stock market and other financial assets are relentlessly gaining ground.


The Covid-19 pandemic has accelerated the digitalization of the world, something that would normally have taken a few more years. This has boosted an imminent massive adoption of blockchain technology along with artificial intelligence and extended reality. Quantum will be the last link and the one that will serve as indicator (when we think quantum, computing always comes to mind, but it is not limited to that; we are already using many particle physics in many applications such as sensors, simulators, photonics, etc.). Financial and global digitalization is imminent, and all institutions are integrating all these technologies at a rapid pace. Change is at hand, and its potential is limitless. Conclusion: Only the prepared will survive.


 

Article available in English and Castilian (Spanish).


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