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Inventory market, bitcoin crash… “For workers who stop their jobs, it is time to discover a job”

In addition to the health and humanitarian dramas, economic setbacks and deprivation of our freedoms that they caused from 2020 to 2022, the pandemic and the related management have also had a particularly damaging and, above all, lasting impact on people’s behavior and on the smooth functioning of our companies. More and more people all over the world wanted to give up their jobs, even to place themselves on the fringes of society. This phenomenon has even led to a formula: The great resignation (in French: the Great Resignation).

But who exactly are these receipts? According to a study by the St. Louis Federal Reserve, it is mainly young and old. The former therefore often resumed their studies or decided to speculate on the financial markets. The latter usually went … into early retirement. How did they manage to take such a risk? For some, domestic help in the form of checks was able to provide a breath of fresh air. For others, the performance of the stock market and cryptocurrencies has also allowed them to inflate their wealth…temporarily…

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Logically, therefore, these mass movements led to labor shortages in almost all fields of activity. As a result, more and more companies around the world, mainly in the developed world, have had to turn down orders due to a lack of labor to execute them. And here the coronavirus pandemic, the lockdown and the measures taken by the authorities have completely broken the scale of values.

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In fact, if the development of teleworking and tools of all kinds was useful in 2020 at the start of the pandemic, their overuse has simply tainted the value of work. The fact of being able to “work from home”, work almost alone in your own corner or not at all and still receive an income has secretly made some people forget that the salary is paid for work. In France it will even have triggered an “epidemic of laziness”…

Likewise, more and more employees are forgetting that teamwork and face-to-face work are an outstanding source of value creation and thus of income and wealth. Here, too, the scale of values ​​was broken. In fact, the rapid and impressive rise of cryptocurrencies and also the valuation of digital companies or even “unicorns” has completely undermined the model of incremental success over the long term and with the power of the wrist.

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From then on, more and more citizens, especially the younger generation, but not only, could believe that they had discovered a new “martingale”: what is the point of working for years when you can pocket in a few months what some people do won’t even touch it for the rest of our lives?! This new, short-term way of life and an irresponsible lure of profits could therefore persuade some to leave the labor market in order to easily find a place in the sun.

Only here, when some could benefit from it for a few months, even a few years, most have died with the collapse in the valuation of cryptocurrencies, many digital stocks and unicorns. For those who have forgotten, let’s remember that the latter have been valued at at least $1 billion while they have never made a penny and that for the vast majority of them they will never realize it.

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It should also be noted that these bubbles, or rather these collective blind spots, were made possible by central banks’ copious amounts of liquidity injections, also known as “money printing”. In particular, this strategic error made it possible to keep interest rates on government bonds artificially low, sometimes even negative, while public debt reached stratospheric heights.

Once again, this reign of “magic money” with negative interest rates has helped shatter the scale of values, fomenting all kinds of financial bubbles and leading most to believe that valuing companies in loss or cryptocurrencies knows no bounds. But fortunately all excesses have come to an end and the clocks are set regularly. Now that those bubbles have burst, it’s clear that those who thought they’d done their job are falling head over heels. Worse still, as high inflation returns, developed countries fall back into a severe recession.

As a result, unemployment, after being masked by bubbles of all kinds and labor shortages, will sadly rebound. In this context, those employees who have been picky and kept up auctions with companies desperate for unavailable labor risk becoming disillusioned. For those who experienced the internet bubble and/or the subprime bubble, this phenomenon is not new. But man forgets. He forgets that bubbles are always followed by crashes and periods of reconnection with economic reality and common sense.

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It is true that the pandemic, or rather the political management that has been made of it, has prolonged the bubbles and grip of the unreal by breaching the scale of values. Didn’t we manage to sell simple computer files for millions of dollars on the Metaverse? Without the collective blindness caused by the pandemic and the billions of euros and dollars wasted in vain, all these excesses would certainly not have been possible.

Only here, through lack of judgment and convenience, have the leaders of the planet and part of humanity allowed them to prevail. To the chagrin of economic rationality, but also of future generations. Because let’s face it, contrary to what some would have us believe, now we’re going to have to foot the bills.

Marc Touati, economist, president of ACDEFI and author of 7 economic bestsellers

His new book, RESET II – Welcome to the World After, released September 1, 2022, is the best-selling business essay on Amazon.

Marc Touati

You can also find his video chronicles at his youtube channel the last of these: stock market, euro, cryptos… will the coaster stop?

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