As the head of Germany’s Employers’ Associations warned last month: “We are facing the biggest crisis the post-war Federal Republic has ever had. We have to be honest and say: First of all, we will lose the prosperity that we have had for years”.
Chemicals and the Economy
The election’s timing could hardly be worse, with Johnson now just a caretaker premier. Russia is threatening food and energy security by cutting fertiliser and gas supplies. The UK should be working very closely with the EU on these critical issues. But instead, we may well see candidates attack the Protocol and the EU to win constituency support.
We are facing a perfect storm of global food, energy and financial crises set off by the war in Ukraine. Analysts need to stop focusing on monetary policy and the inversion of the yield curve. They need to look out of the window and start dealing with the geopolitical reality of Putinflation.
Consumer sentiment is already at all-time lows. Rising energy, transport and food prices will likely soon push inflation above 10%, and interest/mortgage rates to 5%+, adding to the risk of a major and long-lasting downturn.
Central banks and investors believed stimulus programs had created a “New Paradigm” where asset prices would always increase. Now they are starting to realise that stimulus is irrelevant against the 3 Horsemen of the Apocalypse – China’s continuing battle with the pandemic, Russia’s invasion of Ukraine, and potential for famine as rising gas/fertilizer prices mean farmers can’t afford to grow their crops or feed their animals.
These are difficult times, and there is no guarantee that they may not get worse. But they also remind us of the critical need to move beyond the Age of Oil, and develop more sustainable energy resources for the future.
Our pH Report Sentiment Index has been a very reliable guide to the S&P 500 in recent years. Now it is suggesting a major downturn may be underway as the US and Chinese stimulus programmes come to an end.
Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.
OPEC+ oil producers saw prices tumble $10/bbl (13%) on Friday as the world woke up to the fact that the next phase of the pandemic may be underway. And this is not the only challenge that they face. OIL PRICES HAVE ONLY BEEN HELD UP BY MAJOR SUPPLY CUTBACKS The first is the challenge from […]
Plastics producers are now being squeezed from both ends of the value chain. Upstream, the growing demand for Electric Vehicles is starting to lead to refinery closures, reducing feedstock availability. Downstream, brand owners are stepping up the pressure for increased use of recycled plastic, as the new Global Commitment report from the Ellen Macarthur Foundation […]