The economic polycrisis
Jan 17, 2023
According to the historian Adam Tooze, a polycrisis in economics refers to “not just a situation where you face multiple crises, [but] a situation…where the whole is even more dangerous than the sum of the parts”. Strategists from Credit Suisse believe we could be currently facing exactly such a situation with the weaponization of four tools: interest rates, industrial policy, commodities and currency. As autocracies are on the rise around the world, times of the relative geopolitical stability seen since WWII based on the US supremacy are gone. The new instability factors also need to be taken into consideration in the overall asset allocation of financial portfolios. We wonder whether the world really has become more unstable or whether we tend to forget how unstable the situation was in the past ( Vietnam war, Suez crisis, oil crisis, … ).