globalization

Are speculations about the end of globalization grounded? He has.

Autor: Pipeline Capital
Tempo de leitura:
Compartilhe:

Text by Pyr Marcondes, Senior Partner at Pipeline Capital Tech.

The thesis is actually simple. Scary though.

The war between Russia and Ukraine would be the touchstone of something that had previously been shaken and threatened, which is the conception that the world is a single integrated economy and that everything fits together like a great internationally global puzzle. This came to include even nations not traditionally integrated into classical Western economic systems, as was the case with Russia itself and, more notably, China, among other nations not always ideologically aligned with capitalism.

Because of the recent conflict, defend the theorists of this movement of disruption, deglobalization, they believe that now the time has come to separate blocks for good and that each one turns around in the best way he can. Screw globalization.

This theory has economic foundations, those simply mentioned above, and also has ideological and political principles. The soldiers of the end of globalization claim that it no longer makes sense to do business and stimulate economies that foment state dictatorships.

It is also a way of not being more convenient with the expansion and, apparently inevitable, growth of the new world’s greatest potential, China. No longer openly doing business with the country could be, hypothetically, a way of trying to minimize the effects of this growing Chinese economic dominance.

One of the supporters of this thesis, Larry Fink, CEO and president of BlackRock, clearly defended this thesis in a letter to its shareholders last week. BlackRock is the world’s largest asset manager, managing $10 trillion.

For him, it is the end of globalization, as the conflict overthrew the current world order and will have lasting global economic consequences.

Russia’s invasion of Ukraine has officially broken cross-border ties between countries that were already strained by the coronavirus pandemic, notes Fink, as companies and governments around the world will now be forced to “further reassess their interdependencies and reanalyze their international fabrication and assembly”.

War will have many long-term economic consequences, Fink warns, as deglobalization further increases inflation, leaving central banks with a stark choice between higher prices or lower economic activity.

“The world is undergoing a transformation: Russia’s brutal attack on Ukraine has toppled the world order that had been in place since the end of the Cold War more than 30 years ago,” Fink wrote. “The magnitude of Russia’s actions will extend into the coming decades and mark a turning point in the world order of geopolitics, macroeconomic trends and capital markets.”

To support his thesis, markets have been dragged lower this year amid continued uncertainty over the conflict, with the S&P 500 down about 7% in 2022, while the Dow is down nearly 6% and the Nasdaq Composite 12%.

Investors face renewed fears of inflation even as the Federal Reserve prepares to more aggressively raise interest rates, thanks to conflict supply disruptions that have driven up oil and gas prices.

Deglobalization undoubtedly has foundations. And with disastrous consequences. However, radical theories of economic ruptures are not always confirmed as their theorists imagine. That’s what the story shows. We’ll see what she’s going to show us now.

Follow news through the website https://pipeline.capital
and also from LinkedIn
and Instagram

Compartilhe:
Avatar photo

Pipeline Capital

Pipeline Capital Tech Investment Group is a tech-driven advisory and investment platform that integrates intelligence, excellence, international presence, and profitable ventures for founders and investors. Established in 2012, Pipeline draws its name from a famous Hawaiian beach, as its founder is an avid surfer, symbolizing how the business world comes in waves, the opportunities rise and fade swiftly. In the business landscape, it’s crucial to be prepared to spot, anticipate, and capitalize on these waves of opportunity, so our mission is to support companies in catching the best waves and riding them with excellence to secure the best deals. We are not a traditional M&A and investment firm. Instead, we were founded and are managed by entrepreneurs who are also partners of the company. With years of expertise in Tech, Advertising, Marketing, and Finance, we possess deep knowledge of the tech sector and extensive global experience. As a Capital Tech Driven Company, we believe the best business opportunities lie in the intersection of investments and technology.

saiba mais »

Últimas Postagens

Confidentiality and Non-Disclosure Agreements (NDAs) in M&A Processes 

In the world of mergers and acquisitions (M&A), confidentiality is crucial. Protecting your company’s sensitive information is essential to ensure that the sale process

Buy-and-Build M&A strategies: The art of growing with surgical precision

Most companies grow organically until they hit an efficiency ceiling. Those who understand the M&A game learn that growth isn’t just about scaling—it’s about

Pipeline Capital Group acted as the advisor to Digital Solvers in its sale to LLYC

Pipeline Capital is proud to have acted as the financial advisor to Digital Solvers, a Brazilian company specialized in digital marketing and technology, in

Rebranding after an acquisition

After an acquisition, one of the first questions that arises is: should we rebrand or leave everything as is? It’s a strategic decision. More

Connect to the best of M&A world Subscribe to our Newsletter

Pipeline Podcast “Papo de M&A”

Pipeline Capital’s podcast on mergers and acquisitions, innovation and technology.