Age of Chaos

All great changes are preceded by chaos. Changes and innovations often take place gradually, but once in a while they happen really fast. These revolutionary periods, such as the Renaissance and the Industrial Revolution, were preceded by a period of chaos. In Florence, for example, a third of the population died from the Plague in such a chaotic time, while at the same time the city became a renowned center of innovation. After that the Renaissance began.

Chaos (xάος, emptiness) in Greek mythology is the nothingness from which the first gods arose. Chaos is sometimes presented as a bottomless void where everything falls endlessly; not down, because no orientation is possible, but in all directions. Out of this vast grinding disorder eventually arose a new order.

The corona pandemic has now turned into chaos. If you want to organize an event or travel through the world, you find yourself in a minefield of rules about what is and is not allowed. Any moment the rules can change and traffic lights can change color.

Maybe it’s also because the leaders have come to cherish the pandemic. As long as keeps simmering with a fifth, sixth and seventh wave, and with the same number of booster rounds, they don’t have to think about other structural problems. Corona is an ideal diversion that justifies endless printing of money to prevent the people from grumbling and which manages to cover up the greater needs.

Politicians fear the time when a clean sweep will have to be made. Suddenly the real challenges become clear again: the mass immigration, Islamic terrorism, energy security, an aging population, adapting ourselves to climate change, the gigantic mountains of debt around the world, the economic and political power struggle between the US and China, the enormous inequality, the self-destruction of the West-oriented crypto-communist Woke movement and Climate Church who daily sprinkle the media with doom porn, and the uncertain future of the EU and the Euro.

More than the 2008 banking crisis, the corona pandemic is a historic turning point. It is the starting point of a new structural supercycle. After the first wave of globalization (1860-1914), war and depression (1914-1945), the Bretton Woods period (1945-1970), high inflation (1970-1980) and the hyper-globalization wave (1980-2020) now awaits what Jim Reid, the Deutsche Bank strategist, calls the Era of Disorder. I prefer to call this the Age of Chaos, harking back to the ancient Greek meaning of chaos. And chaos in this case does not stand for disorder but for sliding panels. Old rulers make way for new, old power relations are replaced by new ones, dizzying innovations tumble over each other, old business models are replaced by new.

Like Dante Allighieri in his La Divina Commedia, which is considered the pinnacle of world literature, we are on a journey from chaos to the new paradise.

In this, China will become the largest economy in the world, Europe will disintegrate again and millennials along with Generation Z will seize power through the Z-bellie at the expense of the baby boomers. The past forty years have been marked by massive growth in the global workforce, especially the rise in China. As a result, real wage growth and inflation were subdued and inequality exploded. But that period is over. There is a threat of an enormous shortage of workers – this is apparent from the first tentative steps out of this crisis here – because of the aging population and slowbalisation.

Not only the economy will change structurally, but also the financial and monetary system, politics, healthcare, public administration and our lifestyles. The Losers of Progress, currently struggling so much to get into the housing market, will outnumber the baby boomers and effect major changes in tax systems. Tax avoidance is made more difficult, taxes are going up, because all governments need money. Corporate income tax (profit tax) is going up, but so are taxes on income, assets, estates and real estate. There is a redistribution between generations. Agreements have already been reached within the G7 and G20 on the establishment of a worldwide minimum tax on profits. That’s just the beginning.

The cyclical lasting consequences of corona have remained limited in retrospect, but the structural consequences will herald a new era. Welcome to the Age of Chaos!