Is the world heading towards a total turmoil scenario. Be with me!

Today as I write this article, the number of households facing existential crisis, across economies irrespective of whether they belong to the developed, developing or the under-developed nation category, are on the rise. Thanks to the cost-of-living crisis which can be defined as the rise in the prices of necessities of daily life like food, energy, rent etc. in a ratcheting manner and at a pace that is less than the increase of wages & income. Understandably it is a situation wherein a household ultimately will not be able to afford a living! and the rest is imaginable!

Inflation, at present is at a historically higher level not seen in the last 4 decades in some economies. All thanks to the post covid-19 repercussions and the supply chain disruptions caused by the Russian invasion of Ukraine. This has paved the way for the wage price spiral risk on the global economy as a whole. Wage price spiral, also called as inflationary spiral is a macroeconomic theory wherein rise in inflation results in rise in demand for higher wages that increases cost of production and converts into price rise and hence increases inflation again. In simple words, the real disposable income of workers gets depleted over time in an irreversible manner as price-rise feeds wage rise for no good in the long term.

The International Monetary Fund in its World Economic Outlook report published recently in October 2022 clearly says that the global economy is headed towards severe recession in near future.

The real economy is performing even worse than the IMF predictions in some cases.

The Chinese Yuan, the Indian Rupee, the Australian Dollar and many more currencies around the world are crumbling to unprecedented levels at present.

The Great Britain Pound has fallen to an unimaginable level against the US Dollars. Yesterday the exchange rate for the British Pound against the US dollars was as follows:

1 USD = 0.890521 GBP

Today the British PM, Liz Truss, announced her resignation from the top post after being merely 45 days in office, thanks to the volatile state of the economy and nose-diving of the Great British Pond against the US Dollar!

In order to create a ‘CARBON NEUTRAL’ society, it is a pre-requisite to emit 25% less greenhouse gases towards to end of this decade than the present levels in 2022. Otherwise, the world will be at a higher risk of an adverse natural catastrophic climatic disruption that no one on EARTH can afford right now!

Conclusion:

I hate to sound pessimistic, but the reality speaks for itself. My analysis for an impending global melt-down may be shallow in nature but there are numerous other factors like global debt distress scenario, short supplies of food and energy due to geopolitical cross border disruptions, threats of an atomic warfare, persistence of the covid pandemic, etc. that could individually or collectively trigger an undesirable process of events that could lead to a total turmoil scenario!

The onus lies on the shoulders of the leaders to lead in a manner that focusses on inclusive existence rather than on an egoistic expansive threat.

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