Commentary December 30, 2021
By all respects, 2021 was an extraordinary year. Major western stock exchange indices skyrocketed without precedent, key cryptocurrencies – an investable asset class still strongly disputed by experts – exhibited spectacularly high volatility and resource prices, before all those for natural gas, multiplicated severalfold. Not surprisingly, monthly inflation rates marked values not seen for decades in the US, the UK and also in Europe.
All this came about amidst widespread new infections with the Covid-19 virus resulting in massive restrictions of public live and a related slowdown in economic activity. This had left little room for optimism at the beginning of the year, at least in the western world. Only hard-boiled optimists would have expected that the economy turned to the better that soon. Yet massive public rescue measures, combining ultra-loose monetary policy with massive fiscal stimulus measures, resulted in a successful stabilization of economic activity in most of the countries affected.