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The roaring 20’s and the loaded spring theory
The new roaring 20’s was all the rage in 2021 when we thought we were getting out of covid. It was a pretty similar situation to the 1920’s with a big economic boom (and the crash of 1929) but it never happened.
Not yet.
Covid waves and variants kept coming, money printing started to show the consequences, supply constraints and price increases, rampant energy and raw material prices, geo-political tensions, stocks bear markets and today … war.
Russia invading Ukraine.
It seems like someone is stepping on us every time we try to get out of the hole and get some fresh air.
The start of the 2020’s decade is being hard, really hard so far.
What will happen from now?. Nobody really knows. I see the situation as a spring loaded under heavy tension in which case three possible scenarios appear:
- The spring may break and collapse. Meaning we go back to the stone age if Russia-Ukraine tensions escalate to a Global WWIII with nuclear nukes and so on. Who cares about the stock market then.
- The tension may start to release slowly until almost zero, coming back to a 2019 situation
- The tension may stop all at once, the spring shooting to the moon. The roaring 20’s on steroids, the economy would boom like never before. But after some time, the spring in the air would start decelerating and start coming down, faster and faster until it reaches floor again and then rebound in any possible direction: it can make a hole in the ground and get stuck there, it may rebound laterally, diagonally upwards, or jump back to the stars.
Let’s hope for the better.
Know more about Carles at www.carlescarrera.com
