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Inflation: As the global economy deflates, here is what the coming crisis looks like | Economy and Business

Last October, during the presentation of its World Economic Outlook, the International Monetary Fund (IMF) stated that “the global recovery is underway despite the resurgence of the pandemic.” The world’s growth was expected to be 4.9% in 2022.

In January of this year, however, the IMF’s projection for global GDP growth was lowered to 4.4%. In April, it was cut even further, leaving it at 3.6%, mostly as a result of the economic damage inflicted by the war in Ukraine.

Inflation – which already spiked at the end of 2021 due to rising employment and growing demand after the restrictions imposed by Covid-19 – has run amok to levels not seen in 40 years, mostly due to supply chain bottlenecks and the sharp rebound in energy costs. What was initially seen as a transitory situation has taken root, as the armed conflict in Ukraine stalls and second-round inflationary waves arrive.

Last year, to curb inflation by shrinking the money supply, the main central banks drew up a roadmap for the gradual withdrawal of economic stimulus, while still keeping interest rates low to give investors and borrowers breathing room in the post-pandemic years. This strategy of slowly increasing the price of money and shrinking federal balance sheets was laid to waste by Putin’s invasion. The Federal Reserve, the Bank of England and the European Central Bank have been forced to give a sharp turn and accelerate interest rate hikes to try and stifle burgeoning inflation, by slowing the levels of borrowing and consumer spending.

In a world addicted to liquidity since the response to the 2008-9 Great Recession, a much tighter monetary policy is a heavy blow to growth prospects. In addition to rising prices and interest rates, the world will now likely have to contend with higher unemployment. However, each region has its own peculiarities. In the following reports, we analyze the situation of the world’s four major economic zones.

Nord Stream 2 gas pipeline in Lubmin (Germany).
Nord Stream 2 gas pipeline in Lubmin (Germany).Michael Sohn
EUROPEAN UNION

The euro zone walks a tightrope again

LLUÍS PELLICER

The European economy is walking along a narrow tightrope, trying to maintain its balance in the face of two tumultuous forces: rising energy prices and declining growth. Both are intensifying as the invasion of Ukraine continues.

Everything indicates that Southern Europe is preparing to shine this summer, with its coastlines well-populated after two years of restrictions. However, the recovery may skid due to a number of factors: the escalation of the war, the supply-chain bottlenecks created by China’s intense lockdowns, or the tightening of monetary policy. The European recovery fund – endowed with €800 billion until 2027- will be a necessary buffer in the coming months.

“Everything indicates that we are going to have a good summer, but in September it can change. We are going [through] a stage in which we are going to have higher prices and weaker growth,” says María Jesús Valdemoros, a lecturer in economics at the University of Navarra in northern Spain.

The main risk to the recovery is if Putin cuts off the gas supply to Europe. The European Central Bank (ECB) estimates that this would weigh on economic growth in the eurozone, so that it would grow only 1.3% in 2022 and contract by 1.7% in 2023, while inflation would increase even more than the 8% currently registered. Just a week ago, the German government was forced to raise its alert level due to the forecast of not being able to fill gas tanks by autumn. And therein lies the main fear of Frankfurt and Brussels: that Germany will enter a recession and drag down the rest of its partners.

The influential Munich-based Ifo Institute for Economic Research does not foresee that this extreme will occur, but it notes that all the blows received as a result of the war in Ukraine and the lockdowns in China are going to cost Germany 1.5% of GDP. In a normal year, the agency maintains, the country would have already entered a recession.

Faced with this situation, the ECB has debated between raising rates – despite the risk of strangling growth – or maintaining a more lax policy with the threat that prices will continue to skyrocket. For now, it has decided to raise its key interest rates by 0.25% in July and probably 0.50% in September.

For the inflation “hawks,” the Eurobank is too late, especially when the rest of the central banks have been raising rates for months. The “doves,” with the memory of the ECB’s ill-timed rate hikes that curbed recovery efforts in 2011, fear that a hasty increase will cause an economic slowdown… especially if there is yet another external blow, whether it comes from Moscow or Beijing.

As a precaution, several EU governments have acted to cushion their populations from inflation. For instance, Spain has given out bonuses for the most vulnerable workers and reduced the price of transit passes. However, international institutions, from the IMF to the European Commission, are asking for financial reserves to be rebuilt. And, with Germany at the forefront, some governments are warning about overspending.

“It is time to get out of [such] policies. Inflation is high and governments should not make it continue to grow through spending,” says Clemens Fuest, president of Ifo. “It’s a bad decision.”

Forecasts indicate that there are many risks that cloud growth. “Households are seeing their income reduced. Real wage growth has been negative for two consecutive quarters,” said Christine Lagarde, president of the ECB.

There is a possibility that the clouds will dissipate, if, say, the war in Ukraine were to end. But in the event that hostilities continue and the economic battle between Brussels and Moscow persists, it remains to be seen how high energy prices will rise, how far governments can go and when the central banks will run out of cash.

Jerome Powell, Chairman of the Federal Reserve.
Jerome Powell, Chairman of the Federal Reserve.Kevin Dietsch (AFP)

UNITED STATES

Rising prices stop the country from reaching full employment

MIGUEL JIMÉNEZ

Job offers are obvious throughout the nation’s capital: in the windows of banks, clothing stores, supermarkets, movie theaters. It is estimated that, in the United States, there are twice as many vacancies as there are unemployed individuals. The country is nearing full employment. And yet, the economic situation has sunk the popularity of President Joe Biden and threatens his party’s control of the Senate and the House of Representatives in the November midterm elections. Blame it on inflation.

Prices have risen 8.6% in the past year – the biggest increase in four decades. But the daily reminder to Americans that prices are skyrocketing is the cost of fuel. Gasoline has increased in price by more than 60%. On average, it costs about $5 per gallon. There are places where it’s around $8. Furthermore, inflation has entrenched itself and spread to more and more products, from grocery aisles to hotels.

Federal Reserve Chair Jerome Powell has vowed to stabilize prices, even if it comes at the cost of a recession. What he is looking for is a so-called “soft landing,” or to control inflation without the economy contracting and unemployment skyrocketing. In his last Senate appearance, Democratic Senator Elizabeth Warren snapped at him: “You know what’s worse than high inflation and low unemployment? It’s high inflation and a recession with millions of people out of work.”

Powell himself admits that his wiggle room for a soft landing is slim. The Federal Reserve has already made three rate hikes, the last of them being 0.75 points. This is the largest increase since 1994. By the end of 2022, the rates will be between 3% and 3.5%, and next year close to 4%, according to the Fed’s projections. The withdrawal of liquidity will slow down the economy.

Will this lead to recession? “It is not what we are looking for, but it is a possibility,” was Powell’s response before the Senate.

Last week, the IMF lowered its growth forecasts for the United States from 3.7% to 2.9% this year and from 2.3% to 1.7% for the next. It is expected that in 2024, growth will be a mere 0.8%.

“The most likely outlook is very weak growth and persistently high inflation. We see about a 40% chance of a recession next year,” says Ethan S. Harris, global economist at Bank of America Securities.

Recession or not, economic malaise is already palpable. A report published in June indicated that 36% of those who earn more than $250,000 a year (four times the median salary) live paycheck-to-paycheck. If a significant part of the most privileged echelon feels that they can barely make ends meet, it is easy to imagine how the rest of Americans are doing.

Lines in London during the latest public transit strike.
Lines in London during the latest public transit strike.Chris J. Ratcliffe (Bloomberg)
UK

The City sees dark clouds

RAFA DE MIGUEL

After the Bank of England’s (BoE) warning last May that the UK economy would enter a slight recession at the end of 2022, the hard-right of the Conservative Party demanded that the Prime Minister lower taxes. This year, public sector workers have called strikes throughout the summer to demand salary increases compatible with galloping inflation nearing double digits.

Both PM Johnson and Chancellor Rishi Sunak have been trying to contain pressure from their party and the general population, to avoid further aggravating inflation with lower taxes or exorbitant wage increases.

“What is most worrying is that this inflation has been concentrated in what could be called basic goods,” said Andrew Bailey, Governor of the BoE. “Basically, energy and food.”

This is to say that the crisis, above all, affects the poorest citizens. Although the BoE suggests that there could be a modest recovery by early 2023 – thus avoiding two consecutive quarters of GDP decline, or the technical definition of a recession – it is anticipated that the UK will see growth decline next year by 0.25%.

The average price per household for gas and electricity shot up almost €800 in April, and it will reach more than €3,000 (annually) by October. In May, the government approved a 25% windfall tax on the profits of oil and gas companies. Much of this tax was intended to finance single-payment subsidies to millions of households, between €400 and €1,000, to meet the exorbitant cost of living.

The BoE, like other central banks, has reacted late, but with impetus. So far this year, interest rates have already risen to 1%. Focused on combating inflation, the looming economic storms have not been reason enough for the monetary authority to relax its drastic decision. “I am aware of the harsh consequences this will have for many people, particularly those with lower incomes and little savings,” Bailey admitted after announcing the decision. It will now be harder for small and medium-sized businesses to borrow and expand, and for consumers to pay off credit cards and loans.

Johnson now faces a three-pronged problem: voters angry with the galloping rise in prices; some MPs, desperate to keep their seats, demanding lower taxes; and exhausted public accounts after two years of pandemic spending.

A woman passes a coronavirus control in Beijing on June 28.
A woman passes a coronavirus control in Beijing on June 28.THOMAS PETER (REUTERS)
CHINA

The dragon’s ailments grow

MACARENA VIDAL LIY

Chinese Premier Li Keqiang’s meeting with officials on May 25 was unusual because of its size—nearly 100,000 local officials participated in the video call—but also because of his frankness. The head of government acknowledged that the difficulties facing the second world power’s economy are more serious than in the worst moment of the pandemic, when it contracted for the first time in 30 years.

A lethal combination of lockdowns in some of the country’s major cities – including the closure of Shanghai, its financial heart, throughout April and much of May – the war in Ukraine and the crisis in the real estate sector left alarming numbers in April. Most analysts have downgraded their growth prospects for the Asian giant this year. Few, even within official circles, believe that the government’s objective of a GDP increase of around 5.5% for 2022 will be met. The World Bank calculates 4.3%. Other entities, such as the Swiss UBS, forecast 3%.

Consumer confidence has suffered a severe blow. In April, retail sales fell by 11.1%; in May, by 6.7%. Even the consumption of cosmetics has decreased, products that have never stopped seeing their sales grow since China entered the World Trade Organization 20 years ago. Youth unemployment stands at 18.4%, well-above the average of the European Union (13.9%) or the United States (7.8%). The entry of 10.76 million recent college graduates into the market this summer will grow that number even further.

Experts say that the massive confinements, together with constant PCR testing, are mainly responsible for this economic anemia. “The only predictable thing about China right now is its unpredictability, and that is poison for the business climate,” said Bettina Schoen-Behanzin, the VP of the European Chamber of Commerce in China, at the presentation of her institution’s annual report on the confidence of European companies in the Asian country. Sixty percent of the companies included in the report said that doing business in China had become more difficult, and 49% cited Covid among the three main reasons why.

So far, Beijing has introduced relatively modest stimulus measures, including tax breaks for small and medium-sized businesses and increased spending on infrastructure. The most recent data is beginning to show some bright spots: for instance, industrial production for May grew by 0.7%, after a 3% contraction in April. But analysts from Nomura Holdings note that although the reopening of cities “has raised optimism in the short-term, we do not see it as a change in trend, given that the Covid-zero policy will continue until the beginning of 2023.” Possible risks in the coming months are new lockdowns to stem Covid outbreaks, drastic corrections to support the weakened housing market, or problems related to the high debt of local governments.

Although performing below original forecasts, and far from repeating the driving role it played in the 2008 financial crisis, the Chinese economy will continue to grow. “China is not going to enter a recession,” says Alicia García-Herrero, chief economist for Asia at the investment bank Natixis. Neither “is it going to be a source of global recession, but it will be a source of slowdown, to which it contributes to the extent that it does not grow as much as its potential.”

García-Herrero also notes that China is helping to export inflation to the rest of the world. The Beijing government has imposed restrictions on the export of items such as fertilizers and some steel products; the subsequent shortages have triggered international price increases.

“This is an additional source of tension, given that China exports a third of the world’s intermediate goods,” she warns.

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Artificial Grass Can Lead To Increased Flooding Risk, Major Insurer Warns

Artificial Grass And Increased Flooding Risk

Homeowners who’ve opted for artificial turf are cautioned about its risks, such as its connection to flooding and elevated temperatures.

A survey conducted by insurer Aviva reveals that one in five homeowners have either replaced or intend to replace their natural lawns with artificial grass.

Nevertheless, numerous homeowners remain unaware of the potential hazards linked to artificial turf.

Many homeowners are unaware of the dangers associated with artificial grass, according to a new survey

Many homeowners are unaware of the dangers associated with artificial grass, according to a new survey

While the Aviva survey revealed that 32 per cent believe artificial grass can increase the risk of flooding, almost half believe it has no impact.

And a further 9% of homeowners think it can actually help to reduce the risk.

Jason Storah, of Aviva, said: ‘At this time of year, many of us are thinking about making changes to our homes and outside spaces.

‘While it can be tempting to replace a garden with low maintenance artificial grass, these changes can make it more difficult for water to be absorbed.

‘At times of heavy rain in urban areas, drains can rapidly become overwhelmed if the water cannot be absorbed, causing flooding outside and in the home.

‘As our climate changes, periods of extreme weather are likely to increase, including heavy downpours and higher temperatures.

‘Our flood mapping technology shows that surface water flooding is on the increase and it can be harder to predict, so it’s important to be prepared.’

Climate-ready gardens

Alternative ground covering that can have a positive impact on the climate include planning a wildflower meadow.

This is something that 11 per cent of homeowners say that have already done and 13 per cent plan to do in the future.

Mr Storah explained: ‘Even the smallest of planted or permeable spaces can help make a difference.

While it can be tempting to replace a garden with low maintenance artificial grass, these changes can make it more difficult for water to be absorbed.

‘Climate-ready gardens can play an important role in helping to mitigate the impact of heavy rain and reduce the chance of a flood from happening at home.

‘Plants, lawns and flowers can not only help to absorb excess water, they can also bring other climate benefits, including improving biodiversity.

‘Equally, plants in the right location can help to absorb heat during heatwaves or droughts. But it’s important to get ready for the future by locating the right plants in the right places.

He added: ‘Some shrubs and trees can have extensive root systems which may cause some soil types to shrink in periods of hot weather.

‘The materials we use in an outside space can impact the likelihood of our homes being flooded or affected by other climate events.

‘We’d urge residents to ensure their homes, gardens and driveways are climate-ready and resilient to the impacts of extreme weather.’

The temperature of artificial grass can reach levels that could pose a risk to young children and pets

The temperature of artificial grass can reach levels that could pose a risk to young children and pets

It comes off the back of other warnings about artificial grass, including how its temperature can soar during the summer.

The temperature of artificial grass can reach levels that could pose a risk to young children and pets, according to gardening experts Rated People.

Nat White, of Rated People, explained: ‘While artificial lawns are a convenient solution for many, they could become dangerous when temperatures rise as the material can get incredibly hot in the sun.

‘As the UK is experiencing increasingly high temperatures in summertime, it is crucial for homeowners with small children and pets to regularly assess the safety of their artificial grass.

Artificial turf lacks the natural cooling effect of real grass, and it can rapidly accumulate heat due to its polyethylene composition, a type of plastic known for its insulation properties

‘Artificial turf lacks the natural cooling effect of real grass, and it can rapidly accumulate heat due to its polyethylene composition, a type of plastic known for its insulation properties.

‘As a result of absorbing and maintaining heat so effectively, the artificial lawn fibres can become very hot, posing a burn risk to children and pets during the summer months.’

It follows a separate survey carried out last summer that suggested 24% of people would like to see a full ban on fake grass.

The survey by MyBuilder.com also found that a third of people would like measures to be put in place to limit the use of such materials, to help protect the environment.

Expert landscaper James Lewis, who has worked with MyBuilder.com, explains that it is important to do your research when it comes to buying artificial grass.

‘While it’s not for everyone, and there are some obvious concerns for its ‘green’ credentials, there are still benefits to having an artificial lawn.

‘If you are thinking about it, we’d advise you to carefully weigh up the pros and cons before investing in it.’

The pros and cons of artificial grass

Some of the advantages and disadvantages of artificial grass have been identified by MyBuilder.com:

Pros

1. Looks aesthetically pleasing all year round

No brown spots, bald patches, or muddy puddles. There’s no denying that a properly installed artificial lawn can look nice and maintains its appearance, whatever the weather.

2. No need for watering

No live grass means no need for watering in the summer. This saves you time, as well as money off your monthly water bill. It is also useful when the inevitable hosepipe ban comes into play.

3. Low maintenance

No mowing, no watering, no reseeding – there’s no doubt that an artificial lawn is easier to look after than a natural one.

4. Easy to clean

We all know the risk of unseen pet poo and urine on our lawns, but with an artificial lawn you can easily hose it down to keep it sparkly clean.

Cons

1. Cost to buy and install

Although once in place it may save you money, buying and installing your artificial lawn is likely to be a several thousand pound cost. The average cost for installation in an average size garden is between £1,200 to £2,500.

2. Impact on natural habitat

Removing natural grass undeniably has a negative effect on the environment, with the loss of habitat for bugs and wildlife.

3. Drainage implications

Although this varies depending on product and installation, an artificial lawn does not drain as well as a real one. This can cause issues in areas where flooding is a problem, such as in new build estates built on previous flood plains, or in areas close to bodies of water.

4. Can get too hot

Artificial lawns can get too hot for little feet and paws, causing blistering and burns. Vets often warn owners that artificial grass can be perilous for pets, and advise caution when allowing pets onto it.


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Culture

Spain throws away 400,000 tons of lemons: ‘Production has got out of hand’

According to the latest estimates provided by the Spanish agricultural union COAG, in the 2023-2024 season, around 400,000 tons of lemons cannot be sold and will go to waste — about 27% of the planned production. Losses from this massive waste are estimated at €120 million ($129 million). Spanish farmers have blamed the problem on various factors: lemons entering the European Union from Turkey, Egypt, Argentina, and South Africa; investment funds altering the market; supermarkets that only want aesthetically perfect fruit; the rise in pests; climatic adversities… However, some in the sector openly recognize that the main reason for the disaster is the disproportionate rise in the number of hectares cultivating lemons on Spain’s Mediterranean coast.

One of these critics is the World Citrus Organization (WCO), which cites the excessive rise of lemon crops in Spain as the main cause for the disaster. The WCO does not understand why the entry of foreign lemons is criticized when Spanish lemons are found across Europe. “Spain is the leader in the market, it is the one that controls the situation, it is always easy to blame someone else, but we must accept that we are in markets in which there must be a minimum level of competition,” WCO Secretary General Philippe Binard tells EL PAÍS by phone. “Let’s look at what happened with the tractor demonstrations in Europe, our headquarters are in Brussels, the Belgians complained about the Dutch, the French about the Spanish, the Spanish about the Moroccans….”

The Interprofessional Association of Lemon and Grapefruit (Ailimpo) — which represents the producers, cooperatives, exporters and the processing industry of the lemon sector in Spain — has not only distanced itself from the criticism of foreign lemons, it has also admitted that lemon cultivation needs to be reduced in Spain to rebalance supply and demand. Ailimpo proposes a different path to what was seen in some of the tractor protests: apart from tax reductions, improvements in agricultural insurance and promoting increased consumption, it is also committed to a more environmentally friendly model — it supports regenerative agriculture or the management of lemon farms as forests as a means of generating carbon and biodiversity credits.

For José Antonio García, director of Ailimpo, there is no doubt where the problem lies: “Production has got out of hand,” he says. “The data speak very clearly. The cultivation area has gone from 36,000 hectares eight years ago to nearly 53,000 hectares today.” He explains that lemon farmers decided to plant more trees due to the “very striking returns” on the crop. This move prompted other investors to get involved. “In the end, it is an exercise in simple mathematics. If the market is able to absorb 1.1 million tons of lemons, and the estimated production for this season is 1.5 million, there are 400,000 tons that are going to stay in the fields.”

agricultores Málaga Limón
Farmers throw lemons at a protest in Malaga last March.Daniel Pérez (EFE)

Pedro Gomáriz, head of citrus at COAG, acknowledges the excess production in the country, but says it is one of many factors. “The exaggerated amount of lemon from third countries that is entering the European Union is one of the big factors, it is unfair competition, because they are also entering with [phytosanitary] products that are not allowed here, and on top of that they are entering with pests that are not hitting us,” says the farmer, whose arguments have so far not been proven. “They are coming from Turkey, South Africa, Egypt, Argentina. They are flooding the European market with lemons that compete with ours, but without having to meet the same standards as us, treated with products that we do not have here, with much cheaper labor and often subsidized by the state,” insists Gomáriz.

While these complaints are common, the data on lemon consumption in the EU analyzed by Ailimpo, between October 2023 and March 2024, shows a quite different situation. In those six months, the total demand for these citrus fruits in the EU (excluding domestic consumption in Italy and Spain) was 403,000 tons, of which 302,000 came from Spanish fields, while the rest — 87,000 tons — came from Turkey. In other words, three out of every four lemons consumed in EU countries in this period were grown in Spain. According to Ailimpo, these figures are also similar to what was recorded in previous years, meaning they are unlikely to have played a significant role in the disaster of the current lemon season, which runs from September to June.

Gomáriz also blames the disaster on supermarkets’ “oligopolistic” practices, decisions by investment groups, and weather events, while downplaying the importance of the spike in lemon cultivation. “The life of a lemon tree is like a Gauss bell. Its harvest increases, at 15 to 20 years it reaches its maximum and from 20 onwards it begins to decrease. So, of course, there is a lot of new lemon destined for the replacement of plantations,” he says.

“This is the elephant in the room that no one wants to see,” says García, who notes that in the last eight years, seven million lemon tree seedlings have been sold in nurseries in the country. “These are really very typical dynamics of the agricultural sector. We have seen it in other products such as the persimmon, we are seeing it with the pistachio, with the almond tree, they are cycles where the farmer sees profitability in the crop and there is an explosion of cultivation.” García acknowledges that other factors are at play, but believes this is the biggest reason for the current disaster. “It is true that there are investment funds involved in the lemon sector, but they have not invested a single euro in new plantations,” he says.

For Ailimpo, what’s most important right now is to address the losses of this disastrous season. But the organization also believes that green measures are key to ensuring long-term economic profitability. “We have closely followed the development of regenerative agriculture in citrus in California, and we believe that the future really lies there,” says García. He explains that his organization is trying to design a system of green practices to improve CO₂ absorption, which will allow the sector to generate carbon credits. “It seems like science fiction, but it is already working in the United Kingdom, Australia, and New Zealand, where agricultural activity is also generating biodiversity credits. Because when we think about biodiversity, we think about lizards, birds, bees, but we always forget what biodiversity there is in the soil.”

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Culture

Resurgence of Nuclear Threat: Is a New Cold War Evident in Literature, TV Series, and Films?

Is a New Cold War Evident in Literature, TV Series, and Films?

The screen is filled by a scientist who, with eyes like light bulbs in all their electrical splendor, seems to question himself beyond time. He is Robert Oppenheimer, who 48 years after dying of throat cancer — he drank and smoked too much, doctors warned him — has provided the cultural reference point for months. Christopher Nolan, director and screenwriter of the movie Oppenheimer, which won seven Oscars, said in an interview that the American physicist was the most important man of the 20th century because through him, mankind gained the ability to blow up the entire planet.

The spectacular notoriety of his scientific vicissitudes, the political betrayals and the tangled web of Soviet espionage experienced by the New York researcher and his Manhattan Project team has surprised many. After all, it is a film for adults in a time of superhero franchises, a long, dark journey with no possible happy ending and which dissects a deadly serious matter.

One of the keys to its success is perhaps that it links fatally with the present day, when the war between Russia and Ukraine, the conflict in the Middle East, and the tensions between the United States and China over Taiwan bring back a certain air of the Cold War and its arms escalation. Vladimir Putin has for some time been threatening to unleash a nuclear conflict and just this month United Nations Secretary General António Guterres warned of rising geopolitical tensions, saying that humanity cannot survive “a sequel of Oppenheimer.”

Cillian Murphy Oppenheimer
Cillian Murphy (l) as Robert Oppenheimer (r), who is photographed at the New Mexico ranch where the atomic bomb was tested in September 1945. Photo: MELINDA SUE GORDON (AP)

These are shadowy echoes of the past being renewed in the present. “Yes, being very different times, I would say there is a certain revival of the Cold War. The idea of rearmament and the tension of balance, the fear of entering into a direct confrontation, reaching a level of brutal destruction,” reflects Mariano Aguirre, author of Guerra Fría 2.0 (Cold War 2.0). In his book, Aguirre makes note of the great differences between eras — nowadays the struggles between countries are between different types of capitalism, without a trace of socialism or communism and between a fragmentary multilateralism of blocs, more complex than the U.S. vs the USSR equation of yesteryear — but he underlines certain similarities between the period 1947-1991 and the present day. There are processes of escalation and rearmament, the indirect confrontation between superpowers with atomic capability, proxy wars (as in the case of Ukraine), brutal repression of civil liberties in Russia, and a certain air of cultural cancellation in the West if one questions, for example, the expansion of NATO’s area of influence.

Aguirre, an associate member of the London-based Chatham House think tank, also highlights similarities in the growing importance of the art of diplomacy, closed-door negotiations and contacts, hostage exchanges, or the influential role of certain media. Examples of this would be the exchange of the women’s NBA superstar Brittney Griner for a Russian arms dealer, the current situation of The Wall Street Journal reporter Evan Gershkovich, accused of espionage and imprisoned for a year in Russia, or the case of the United States leaking to the media that diplomatic sources had already warned Putin’s government about the possibility of attacks in the Russian capital before the massacre at the Crocus City Hall, northwest of Moscow.

Little Boy Bomb
A replica of ‘Little Boy,’ the nuclear bomb dropped on Hiroshima in August 1945. MPI (Getty Images)

You and the Atom Bomb

It was George Orwell who first spoke of the concept of the Cold War as a radical geopolitical shift, because of the possibility of mutual self-destruction brought about by the development of the atomic bomb. He wrote about the subject in an article published on October 19, 1945, in Tribune magazine. In his essay, You and the Atom Bomb, Orwell warns that living in the shadow of the nuclear threat “is a peace that is no peace,” but a new war landscape he called the Cold War, which now seems to be revived again.

This atmosphere is related in public reports, non-fiction books and novels. In 2023, the Brussels think tank Bruegel warned that we were heading toward a new Cold War between two large blocs led, respectively, by the United States, the hegemonic power, and China, the emerging one. For their part, researchers at the Royal United Services Institute detect that Russia is rekindling some of the methods of the 1970s and 1980s, involving clean agents on long-term espionage missions — so dear to Moscow since the Soviet era — as was the case with the theft of atomic secrets by Klaus Fuchs, a member of the Manhattan Project. And from Spain’s Elcano Royal Institute, analyst Jesús A. Núñez Villaverde warns that the latest moves NATO seems to be planning “take us back to times we mistakenly thought we had overcome, with the only exception being that, if previously we were talking about the European Union, now we are talking about Russia.”

John MacKenzie
Michael Caine (right) in John MacKenzie’s The Fourth Protocol.

Reality and fiction

That old icy air is also being revived in video games, television series and movies. The Call of Duty videogame franchise is enjoying success with Call of Duty; Black Ops Cold War, set in 1981, where two of the game’s characters are Ronald Reagan and Mikhail Gorbachev, and the protagonist is an alleged Soviet spy trying to steal U.S. nuclear secrets. On the streaming platforms is the documentary series Turning Point: The Bomb and the Cold War (Netflix, 2024), which across nine episodes narrates how close the world came to a nuclear apocalypse in the 1960s. As for possible fictional apocalypses, Oppenheimer’s 2023 release was joined by Wes Anderson’s Asteroid City, which won the Palme d’Or at Cannes, and is set in the 1950s in the context of nuclear testing in the U.S. desert near the Mexican border.

“On August 6, 1945, in the blink of an eye, the world changed completely. That had a full impact on popular culture and on comics,” reflects cultural analyst Giovanni Pasco, who specializes in the sociopolitical reading of comics. He emphasizes that after 1945 in the United States, highly politicized superhero figures emerged, fully involved in the present war of the atomic bomb and its consequences on the planet: The Fantastic Four were a family exposed to cosmic rays in a rocket when they were racing to beat the communists in the space race; The Incredible Hulk was a scientist accidentally exposed to gamma rays during a test; Spiderman was a boy bitten by a radioactive spider and The Watchmen exemplifies a dystopian fiction that harkens back to the Cold War era, where the world is constantly on the brink of nuclear disaster. And it’s not just about the past or future, but the present: these are all superheroes that to this day are being transmuted into movies or series.

Perhaps the Cold War never quite died down. After the 246,000 civilians killed by the Little Boy and Fat Man bombs dropped on Hiroshima and Nagasaki in August 1945, after the decades-long psychological confrontation between the Soviet Union and the United States led the U.S. Civil Defense Service to broadcast radio and television spots on how to behave in case of a Soviet attack (with the voices and faces of Johnny Cash, Groucho Marx, and Boris Karloff), the fear of the bomb and its geopolitical consequences has resurfaced.

Barbara Moran, an American science writer and author of The Day We Lost the H-bomb (2009), about the nuclear accident in Palomares, Spain, believes that the cultural preoccupation with the bomb is changing over time. Before, in the movies, “maybe there was fear of radiation, mutations, and nuclear destruction,” she says, while now people seem to be more “concerned about human weakness, betrayal, and political consequences.”

Regarding the world’s current political leaders, it so happens that their ties to the Cold War era are very close. “For better or for worse, Joe Biden was trained in those times and knows very well the potential dangers of confrontation between nuclear powers, and Putin was molded as a spy in the final years of the Cold War, in the times of the decline and disappearance of the USSR,” Aguirre notes.

Against all odds, the intrigues between spies and the nuclear threat are once again topical. It is something that seems from another time, from another world. As the secret agent John Preston, played by Michael Caine in the movie The Fourth Protocol (1987) says to the different heads of the secret services, in the face of their conspiracies in the heat of atomic danger: “It’s about time they put you in a fucking museum.”

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