Thoughts about the time after Corona

The world is in the grips of a virus, concerning policy, economy and socio-economics. It is a time full of uncertainty and contradictions where, under a state of emergency, elected representatives are ruling and taking measures based on scientific assumptions and the preeminence of health. But every crisis also constitutes an opportunity for change, as already the Greek word “krisis” literally not means the dangerous situation itself, but its turning point. 

Even if we already know for sure that the crisis comes to an end, a return to the “pre-corona” normality” might be excluded. Vulnerabilities of the systems have been largely disclosed: Dependencies on huge, global “just-in-time” supply chains, neglect of certain professional groups, an insufficient supply of health systems … etc. Instead of “faster – higher – further” with a constant, global accessibility, a new conscious distancing could arise with an increasing demand for local offers, even if they tend to be at the expense of higher prices and less competition. 

The role and the entitlement of politics as the doer with a propensity for far-reaching decisions could intensify. Today, those responsible are already outdoing each other with their support programs, whether fiscal or monetary. Within days, (uncovered) checks are issued like on a conveyor belt, the consequences and repayment procedures of which are ignored.

Insofar as the relevant global markets and productions are affected by a reduction accompanied by a strengthening of the local structures, price increases will probably be inevitable. Initially ignored, as a consequence, the (legitimate) employee’s demands for compensation could drive the inflation rates higher, followed by consistent capacity adjustments by the companies. The end of the record employment would then begin just as much as the end of the era of low-interest rates, since price increases, on the one hand, and massive price distortions on the bond markets by the central banks, on the other hand, would cause the yield curve to rise more steeply.

With this, for example, real estate is about to be revalued, while gold and stocks are favoured. However, (still) mostly unheeded: The consequences of the massive drop in oil prices, essentially the dissolution of the old Opec power cartels and a fight for market shares. A warning for the exporting (emerging) countries, an unexpected economic impulse for consumers. Currencies return to their origins, which should lead to a strengthening of the reliable currency blocs. They would mean more bad news for borrower emerging countries, with far-reaching consequences for their political stability and systems.

Conclusion: The (investment) world as we have known is history. New constellations involve risks and offer opportunities. However, success factors remain the same: Expertise, thorough analysis and above all diversification of investments across regions, currencies, asset classes and instruments.