“Black Swans” of the Year of the Dragon: the main factors that could lead Russia to a crisis in 2024 are named

— How many challenges do you identify that could provoke a crisis in Russia and a deterioration in the lives of citizens?

— I see seven “black swans” that can arrive either one at a time, or in a flock, or in any combination. If they are not stopped by the actions of the authorities, then each of them is capable of causing a global and regional crisis, and simply worsening the economic situation of Russians. Let’s start in order. The first risk is the collapse of the eurozone.

— Wait, wait… The EU introduced the 12th package of anti-Russian sanctions in mid-December and immediately announced that they were preparing the 13th and 14th packages against our country. In addition, the European Commission constantly allocates assistance to Ukraine and hints at the possibility of seizing Russian assets. Somehow it doesn’t look like the European Union is falling apart. And if so, will this really become a problem for our country?

— I’m talking about the economic consequences of the collapse of the eurozone. This is not the first time that the risk of its collapse has arisen. The previous time this was discussed was ten years ago in connection with the problems of Greece. Then, to prevent collapse, the local government had to introduce unpopular measures: the so-called Greek “haircut” of half of the population’s deposits was carried out, the authorities reduced pensions by 70%, cut budget places, as a result, unemployment was at the level of 40-50%. Now the problem of European countries’ sovereign debts has worsened again. There is a risk that Spain, Italy and even France will decide to leave the euro zone. If this happens, the dollar will sharply strengthen and gold prices will rise. And sovereign debts will likely be converted into national currencies, which would amount to a sovereign default. All this will lead to a large-scale banking crisis in Europe without any chance of saving the main financial institutions. As you might guess, if the euro collapses, Russians who kept their savings in this currency will lose. And the Europeans themselves will have no time to talk about the ethics of appropriating other people’s assets, as a result of which they may encroach on our country’s funds “frozen” in the EU.

– Convinced. What is the second risk?

— Scandals surrounding the OPEC+ alliance of oil-producing countries and new oil shocks. Let me remind you that just the other day Angola decided to leave this cartel. This news did not attract much attention, but I want to remind you that the OPEC countries have previously shown their ability to reduce production, and suddenly the configuration begins to change. In addition, OPEC+ is moving away from the US dollar as a settlement currency.

— We have heard many times that the dollar will cease to be a reserve currency when oil is no longer traded for dollars. Is this also a risk?

— Everyone will have the opportunity to check whether this is true if the scenario comes true. The US economy has already shown its vulnerability and dependence on oil prices. And OPEC+ quotas can become a very destructive weapon against the American economy, especially on the eve of the presidential elections. At the same time, OPEC+ is likely to undergo reform. Now the principle of “one country, one vote” applies there. However, a fairer option is when votes are distributed in proportion to production or export volumes, that is, as in a joint-stock company. In this case, the “major shareholders” of OPEC+ will be Russia and Saudi Arabia, which have learned to get along well recently.

– Let’s move on. What is the third “black swan”?

– This is a new pandemic. Four years ago, the spread of coronavirus tested the global economy. Central banks of developed countries solved the issue using the “printing press”. Of course, drug and vaccine manufacturers made good money. And today some virologists claim that the world is facing a new and more severe pandemic. Consequently, we are threatened by another quarantine and its consequences in the form of a slowdown in global trade, a stoppage of financial markets and everything that we have already seen in 2020.

“Perhaps this time it won’t be so scary, because the experience of COVID-19 has taught humanity a lot. Digitalization has rapidly developed. As it turned out, working from home is quite possible…

“But you remember what happened to the real sector of the economy: a recession, a sharp increase in unemployment, a collapse in prices on the stock and commodity markets may again become a reality. Let me remind you that during the COVID-19 pandemic in the United States, oil futures fell to negative values. And Russia will be under attack twice, since the collapse of oil prices and the fall in budget revenues coincides with a significant increase in healthcare costs, and even in the context of a highly likely continuation or slow curtailment of the health care system.

— Since we remembered about the special operation, I understand that another risk is associated with Ukraine?

— Yes, the fourth “black swan” is Ukraine’s debts. Who will pay for them? The completion of the special operation in any configuration will raise the issue of Ukrainian debts and the costs of restoring this country to Western leaders. The World Bank has estimated the needs for the restoration of Ukraine at $411 billion. Who will provide it?

“Judging by the rhetoric in unfriendly countries, they hope to solve this problem by seizing Russian assets. Recently, the Supreme Prosecutor of Germany announced this; before this, Poland and Estonia made similar proclamations many times, and Brussels has been looking for ways to take such a step for the second year…

— Indeed, almost all of Ukraine’s debt can be covered by the frozen part of Russian international reserves. But this would be outright theft, because there are no legal grounds for their transfer to Ukraine. And if the European authorities do not decide on complete chaos and misappropriation of Russian money, then, most likely, the costs will fall on the weakened economies of the G7 countries, which will further fuel inflation, unemployment and other negative things in these countries.

— If we are talking about conflicts, then we can assume that the fifth challenge is a likely confrontation between China and the United States around Taiwan?

— Yes, a military conflict of two nuclear powers of this level could end tragically not only for the global economy, but also for the entire world civilization as a whole.

— This will be the third world war, because Moscow will most likely support Beijing. And not only her.

“That’s why all participants will try to avoid the most apocalyptic scenario, and the UN will clearly make its efforts to this. So I suggest we focus on the economy. Let me remind you that China is also one of the main creditors of the United States. I would like to hope that the leaders of the superpowers will remain prudent, but if this is not enough, the result of the confrontation will be the disintegration of the world into several military-economic blocs.

— What will the sixth “black swan” look like then?

— In my opinion, this is the launch of an Islamic finance center in Istanbul. Turkey plans to implement this project with the expectation that there are 2 billion Muslims in the world and it is better for them to have their own financial centers that are not associated with the Americans, Europeans or Asian countries. Erdogan has long been suspected of wanting to restore the Ottoman Empire. If this fails in a geographical sense, then at least in the field of economics and finance he would like to do it. The outflow of capital, primarily from investors from Islamic countries, from traditional financial centers to Istanbul will cause serious turbulence in global stock and currency markets, which could have tragic consequences for a number of states and first-party financial companies.

“At the moment, this seems an unlikely scenario, despite Erdogan’s best efforts, because Turkey has many of its own financial problems. And so serious that the local Central Bank was forced to raise the key rate at the last meeting to 42.5%.

“The fact of the matter is that such a tough policy of the Turkish regulator can bear fruit. In addition, if Taiwan goes up in flames, the financial center in Istanbul will look like quite a “safe haven.”

– Fine. We have reached the seventh “black swan”. What will it consist of?

— In the complete digitalization of the business world.

– Is that a problem? Moreover, Russia is one of the leaders of this transition. Our Central Bank is already testing the digital ruble. And similar processes are taking place in the world. The Chinese regulator is focusing on the digital yuan. Together with Russia, most G20 countries will soon have digital currencies.

— All this will fundamentally change the world of finance, commodity and stock markets. And the status of the dollar and the euro, as well as the United States as the main issuing center and the main stock market in the world, will be in question. And the Americans are unlikely to want to voluntarily give up their hegemony. This could lead to the disintegration of the world into several trade and economic zones and the consequences that I have already described in other challenges.

— And which of the scenarios, in your opinion, is the most likely?

“I hope that God will save Russia and that none of them will come true, and that the Year of the Dragon will not tear apart our planet. But my job is to warn you, because living in an era of change is not the most pleasant experience.

– Then lastly, a purely practical question. Taking into account all the risks, how can Russians preserve their savings?

— It is best to stock up on gold in times of crisis. And in case it does, you can add the most fundamentally attractive shares of Russian companies. In addition, in Russia in the next six months there will be very attractive rates on ruble deposits.