Marketing Info

Is the world ready for deglobalization?

The Russian invasion of Ukraine has resulted in the construction of a new wall, but not on the US-Mexico border. To JPMorgan CEO Jamie Dimon’s previous comments, Algonquin Capital said that the conflict could result in a “restructuring of coalitions and a restructuring of global business”, in which governments and firms “have different geopolitical interests for key commodities”. countries cannot be trusted. and services.”

Simply put, national security and supply chain strength will be above the minimum manufacturing cost. In retrospect, the blog post argued, Germany’s decision to phase out its nuclear reactors and depend on Russia for 70% of natural gas. The country is now trying to find new sources to avoid limiting the supply of energy.

After February 24, 2022, democratic governments all over the world will certainly reconsider their dependence.

Another example is Taiwan, which has two-thirds of the world’s semiconductor foundries. Given China’s interest in Taiwan, maintaining the status quo seems unfair. In light of this, Intel has already announced plans to invest $40 billion to build plants in Arizona and Germany, and other companies may follow suit.

Globalization in combination with technology and demography has reduced inflation in recent decades, creating a fear of deflation. As globalization prepares to reverse, central bankers will be more concerned with a more modest change in long-term price appreciation rather than a return to 1970s-style inflation, as automation and technology continue to exert downward pressure on pricing. keep.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Share via
Copy link