Society & Lifestyle

2020: A new world crisis, or just a coincidence?

Is anything else happening in the world apart from the coronavirus?

new world crisis

2020: A new world crisis, or just a coincidence? Source:

Nowadays, everybody’s talking about the coronavirus. All media, magazines, newspapers, etc have at least a couple of articles/news about the new virus on a daily basis. From this perspective, PaySpace Magazine is not an exception, as we have also published some articles about COVID-19, namely, about how it can affect cashless payments and the crypto market.

However, today, we’d like to talk about something different. If you ask me, I’ve got a strong feeling that most people have just about forgotten to look around sometime amidst this flood of coronavirus-related news (as well as fake, panic-boosting ones). A string of very “interesting”, at some point, events have occurred lately, but most of them have been simply overshadowed by the flurry of coronavirus forecasts, predictions, articles, news, and everything you can only (or can’t even) imagine, and even more.

Therefore, let’s consider the coincidence of several occurrences, which, at some point, being put together, can be called a crisis, or at least a pre-crisis situation.

New possible world crisis preconditions

 The ECB has recently reported some unfortunate conclusions. Source:

  • In early March, OECD (Organisation for Economic Co-operation and Development) analysts lowered their global GDP growth forecast for 2020, thus, the new rate was 2.4%. The ECB (European Central Bank) has also recently reported some unfortunate conclusions, namely, forecasting the likelihood of economic recession, and claimed that annual real GDP growth might decline to 0.8% in 2020 (from 1.2% in 2019). However, Isabel Schnabel, who is a member of the executive board of the European Central Bank, said that even the most recent figure (0.8%) is not final.
We are experiencing a very severe economic shock. The likelihood of a recession has increased markedly
Isabel Schnabel, member of the executive board of the European Central Bank

The IMF (International Monetary Fund) and the World Bank will publish their forecasts in April, but it is already clear that the forecasts will be rather disappointing (i.e. deterioration of the situation).

  • Now to other “good news”. In early March, Saudi Arabia and the Russian Federation could not agree on the extension of the OPEC agreement on limiting oil production, and Saudi Arabia launched a price war. As a result of these actions, Brent oil dropped by 30% over the weekend – to $34. This is the worst price statistic since 1991 when the Gulf War broke out. The cost of US crude oil fell to $28. The Russian Federation will undoubtedly face some difficulties due to this situation, but it may also become another big shock for the global economy. Moreover, it seems like a risk to the renewable/green energy concept in the long run.

Brent oil dropped by 30% over the weekend. Source:

  • The yield on the 10-year United States Treasury bond decreased below 0.5%, which is a record (the lowest price ever). A lot of investors from different countries started buying up those US securities. To make you understand how bad things are (and the way “record low price” is really a record), it is worth mentioning that as of late February 2020, the historical minimum price was 1.3-1.4%.
  • Another situation is about the price of gold. Against the backdrop of the spread of COVID-19, the aggravation of panic in the global financial market, and decrease in bond yields, the price of gold showed the most significant weekly increase since the crisis of 2009. Furthermore, it was the highest price over the past seven years.
  • Let’s also remember that the Fed (Federal Reserve System) has slashed interest rates (by a full percentage point). Moreover, it was the second rate cut in two weeks. What’s interesting, the cut was the biggest one in the entire Fed history. The aim of the Fed was probably to encourage businesses to borrow money, which, in turn, is supposed to incentivize investment and hiring. On the other hand, it is considered to be a good time for consumers to refinance their current debts in order to release some pressure from their liabilities.
  • Despite the Fed’s creative solution and monetary easing, the US market volatility level went crazy in mid-March. In fact, it was the largest market fluctuation since 2011. And this happened right after the stock indices of the USA and Europe decreased by more than 10%, which, by the way, was the biggest market meltdown since 2008.
  • On March 12, the Shanghai SSE Composite Index fell by 1.52%, and the Japanese Nikkei – by 4.41%. Hong Kong HIS has also fallen by 4%. European markets didn’t perform any better since the French CAC 40 index decreased by 12.3%, the English FTSE 100 by 10.9%, and the German DAX index by 12.2%. Mostly, it was the spread of coronavirus which affected the market.

Let’s not forget the recent default in Lebanon. Source:

  • Let’s not forget the recent default in Lebanon, which was named by mass-media the “Switzerland of the Middle East” before the country declared a default.

The bottom line

It’s good to look up sometimes and ignore the havoc that was wreaked for a second. Some interesting things are going on in the world, and we can’t blame coronavirus for everything that happens. I don’t encourage ignorance and don’t urge you to be careless (about the virus), but it’s always good to see the overall picture. Nobody wants to jump to conclusions, but come on, so many occurrences have happened simultaneously. It doesn’t look like a regular coincidence.

Anyways, we’ll try to continue to monitor this pre-crisis situation.


Pay Space

6828 Posts 0 Comments

Our editorial team delivers daily news and insights on the global payment industry, covering fintech innovations, worldwide payment methods, and modern payment options.