2022 has began with a bang and some excitement. Russia may attack Ukraine, inflation is high and if history repeats itself, there could be a revolt. Boris Johnson has apologised, people are still angry, a lot is already happened so far.
Covid has not disappeared and while the latest variant of concern is a bit less concerning, the stress on the health workers has continued. So in the midst of all this except, let us explore what the top trends for 2022 will be.
Geopolitics
Geopolitics is the backdrop against which our lives continue and sometime it is easy to ignore until it is cannot be ignored. It is worth remembering geopolitics also includes economic and other strategic affairs of a nation such as the Belt and Road Initiative by China, and others that have been announced by the EU and the US.
There are number of potential flash points that have come to light in the past few months and this trend is set to continue or escalate further.
Russia and Ukraine tensions have come up again as Russia has troops placed around the border with Ukraine and is looking to meet with NATO to discuss boundaries.
China and Taiwan is another potential flash point that has been heating up and in the case of Russia, concessions are being considered however until there is a guarantee from NATO that it will not expand, this issue is set to continue and lead to tensions.
The recent acts of aggression towards Taiwan has caused major world powers to iterate their support for Taiwan should tensions escalate further. Wether they will be able to defend Taiwan is another matter in itself considering what happened in Afghanistan.
These potential flash points are not entirely new but with the new way in which the US is perceived, it is difficult for countries to rely on Uncle Sam to come to the rescue each time and Uncle Sam has been accused of meddling.
The withdrawal from Afghanistan in 2021 and mis-management of the Covid vaccine roll out has to an extent has given opponents of the US something to say with regards to the US not being able to always defend their allies and manage its own house.
Potential conflict alone is not the only aspect of Geopolitics. For example, BRIC nations, Russia-China alliances, the shift in global and trade power and influence are all aspect of geopolitics that will continue this year.
The Economy
Inflation brought on by skills and supply shortages is having an effect not the economy and despite the Fed saying inflation is transitory, the data at least for now show it is still not transiting as swiftly as people will like.
Inflation eats into the purchasing power of the currency and you can read more here to understand what inflation is and what the different causes are.
The Federal Reserve mentioned inflation is transitory however CPI and other indicators show inflation is increasing and has not yet peaked. Across Europe, the Americas, Africa and Asia, inflation is on the rise.
In the UK alone, several energy suppliers have gone bust due to the higher cost of energy and consumers are feeling the pinch.
What Has Caused The Rise in Inflation?
Cast your mind back to 2020 when the lockdown was introduced across many countries in the world. As a result of this, supply lines were impacted by delays and shortages in the work force.
Shortages for materials and skills, coupled with increased demand has caused inflation to rise. As the same demand existed for the same products however there was less supply due to shortages.
Actions such as lowering interest rates by Central Banks also created an environment for inflation to grow. Other measures like removing stamp duty for home purchases up to a certain amount inflated the home prices since that created more demand, more money slushing around and the same number of houses.
Other covid variants of concern also have an effect on decisions taken by government and the economy as a result. Vaccine inequality as it has been coined means there are corners of the world where the vaccine roll out has not progressed, increasing the possibility of covid mutations or variants of concern.
Looking beyond that, the lack of faith in the government coupled with mis information and everything other thing means people who have access to the vaccine have refused to get it.
The Delta variant is one of such and so is the Omnicron variant. With the Omnicron variant, we see there was a ban on travel between countries, the market reacted and the economy suffered even more.
As more information was obtained about how the variant behaves, the reduced likelihood for hospitalisation and deaths, the economy has opened up albeit cautiously.
Hybrid Working
Covid-19 has made changes to how we consider work and how work is carried out across the board. For a number of people in the economy, working from home is not an option because of limitations in being able to carryout their jobs but for others who have this option, major changes have happened and continue to do so.
Companies are moving from a location based system, to a people oriented model. Having more days to work from home in some cases allows for the work to be done better, increases flexibility in personal and professional lives, is beneficial to the environment due to lesser pollution and can benefit a lot of people in the value chain.
Some companies are slow to adapt to this and despite what they say, Presentism as a bias is something people who work from home have seen to be an issue since there is a tendency for them not so be considered as much as those who are present.
With many people leaving their jobs for newer or better jobs, some Companies can be more choosy in what they offer and are adjusting to the needs to their workers. Working from an office building five days a week is something that has drastically changed during covid and the trend is towards more flexibility.
In other cases it is about getting more value for your money; moving slightly further from the city centres and living out in the sticks is a trend that has increased during covid. Bigger gardens and a better quality of live is something many people who can afford to have taken advantage of.
These changes are here and will be with use for many years to come and it will depend on the job, the role and the position.
The Metaverse
Facebook has now rebranded as Meta and speculation exists if this is a way to distance itself from the damage after Frances Haugen blowed the whistle on some of the practices at Facebook and how it affected its users.
Putting those allegations and issues aside, the Metaverse sounds like a huge opportunity; there is a video here with detailed explanations (by Mark himself).You may need to grab some popcorn for that one.
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Think back to the early days of the Internet – to a time when it became publicly available for use and exploration. Think of the companies, technologies, individuals and events that have shaped and impacted our lives. The Metaverse is no different and presents a potentially is bigger opportunity.
The way in which people will interact, pay for services, play and meet is being redefined. As an Investor and savvy individual, the real questions include who are the biggest players in this space? What are some Metaverse themed investments? What companies are laying the backbone or enabling the Metaverse?
All these questions and much more should allow you to focus on the opportunity not only as a consumer but as an Investor.
Cryptocurrencies
It is a given to have Cryptocurrencies as one of the top trends in the year for at least the past five years. This year is no different and the fact that it is a trending topic does not necessarily mean it will go up in value.
Last year saw new highs in Bitcoin, shifts to NFTs, the rise of Doge, Shiba Inu and other meme coins. Since then, the price of Bitcoin has fallen by up to 20% and that has rattled some investors and speculators.
Many times the focus is shifted from looking at how the blockchain technology is being applied, to cryptocurrencies and this is in a way has allowed some investors to be short sighted.
Inflation has caused Investors to find some safety in other asset classes and Bitcoin has been part of that play however with the well known volatility in Bitcoin, these are uncertain times for Investors.
Should we buy more cryptocurrencies? Should investors wait and see? What factors will actually drives the price of Bitcoin another cryptocurrencies and what other opportunities are out there? These are some of the questions to consider.
