GLOBAL FUTURE ANALYSIS
HEADWINDS | CORPORATE DEFICITS
As cost of energy/materials rise, credit gets expensive and hard to get and markets slow down and economies goes into stagflation based recession. Business will enter severe weather. Economic models (now strong international/national/regional) will change. The local economy will be king as the price of transport and mobility (due to strong rising energy prices) will make the products/services of those who need those two not very attractive. Transport and mobility are in times of expensive energy contra productive to prosperity. This not avoidable (as cheap oil is over) huge change/reshuffle of the economy will cause a tsunami of corporate bankruptcies. Companies will bleed jobs and debts. Only local player and global/national/regional players that has adapted a new short distance model will survive. Nike still can exist in the post cheap oil era. The still we design and brand. But their production process will be decentralized. This is just an example. Only companies that adjust themselves to the expensive energy situation will be survive. And yes, it's difficult to make major write downs in times of restructuration in this process. Both are contrary, but both are needed. The Credit Crisis (credit overstretchiness in times of tailwind), makes it companies/corporations even more difficult to realize this cost prices driven change in economic model.
Author: Gijs Graafland
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