The spread of forecasts is extraordinary. Citi doesn't rule out oil at $65

We live in an amazing time. The spread of forecasts is extraordinary. Citi does not rule out oil at $65 in 2022, JPMorgan Chase at $380. The spread of values for the reduction of Russia's GDP is also significant: from -3.5% to -12%. The values are reviewed every month. In March, the consensus was -8%, in April -9.2%, in June -7.5%. All this suggests one thing - we live in an era of extreme uncertainty.

Exactly 45 years ago, John Kenneth Galbraith published The Age of Uncertainty, stating that the golden age of stability and predictability is coming to an end, replaced by a period of greatly increased uncertainty. Four decades later, in 2017, economist Barry Eichengreen, looking back on those times, concluded that in 2017 the "uncertainties" of the 77th were enviable, and if Galbraith were writing the same book now, he would probably call the 70s "The Age of Confidence". Another five years have passed - and this time, which preceded the pandemic and the military conflict in Ukraine, now looks like a relatively safe and stable one.

The picture shows that since the 2010s, there has been an increasing trend in the dynamics of global uncertainty.

Indeed, there are many challenges: protectionist sentiments, demographic changes, decarbonization, inflationary pressures and a crisis of confidence in the old rules of the game.

But capitalism has, in my opinion, important advantages: as it evolves, it only expands, but this expansion does not lead to destabilization. On the contrary, over time we see the relief of those problems that arose in the past. Periods of instability are simply stages of transformation, not the end or collapse of the system.

Marx, it seems to me, was mistaken: contradictions do not increase with time, on the contrary, they are smoothed out.

In a global sense, we are in for an interesting decade.

Grigory Bazhenov 2022-07-06