Where is the positive perspective?
It is quite understandable that changes to the unknown after a long stable phase without wars and catastrophes in Central Europe are unsettling people. This general discomfort is further compounded by media noise and the echo chambers of the internet. Yes, the world is changing.
Without wanting to talk small about the many problems of politics, the environment, the economy and society, where there is shadow there is light. Especially as an investor, one does well to see and seek chances there, instead of being driven crazy by general hysteria. The future is happening now. And because of the headline panic one overlooks them too easily.
For example, Russia recognizes climate change as an opportunity to break its previously unfavorable geostrategic position. The Northeast Passage from the Atlantic through the Arctic Ocean into the Pacific plays a key role in this. With the increasing ice-melting, trade flows between Europe and East Asia could be much cheaper than around Africa. By the year 2024, today’s freight volume is expected to quadruple, by as much as fivefold by 2030. In addition to commodity, this route will also be used for export of raw materials, such as ore, crude oil or refrigerated liquefied natural gas (LNG). The USA also sets on the energy carrier LNG. Since April 2019, LNG is transported by rail in special safety tanks. And it will not be long before the first ships land in Europe’s ports. This ensures a favorable energy supply for the economy, because the Russian gas pipelines to Europe are still in plan as a competition project.
With the systematic development of shale oil depots, the US has landed a second coup. Today, being the largest oil producer in the world and independent of imports, more than 9,000 companies are competing for more efficient processes. Through consistent use of data with the help of artificial intelligence, prices are significantly reduced here as well. This is an important factor in Trump’s plan to bring the US economy substantially forward, while in Europe companies with restrictions and CO2 targets are systematically treated. And if you watch the videos of Boston Dynamics, you’ll see there is no doubt that the next economic revolution will come from the US. The specialists are trained in excellent universities or attracted to the US with a lot of work-freedom and low taxes.
China had announced its project of the New Silk Road a few years ago. This infrastructure project connects China with Europe and Africa by land and water. Overall, this project affects around 62% of the world population and about 35% of the world economy. It is financed by the state-owned Silk Road Fund, but also by Chinese investors and international private and state funds. The economic, political and social effects are not foreseeable today. But they are likely to be immense and will completely change the world as we knew it before. Prosperity is growing along the trade routes with the project and will bring a fundamentally change of the social system. This could make it possible to pacify the Middle East increasingly.
For Europe, these are in principle good conditions. However, one must finally understand that Europe is no longer the navel of the world. Governments should replace unrealistic utopias with pragmatic plans. Above all, they must give the economic progress the freedom to develop. State intervention is poison, leading to dangerous distortions of competition, misallocations and bubbles. The relationship with Russia should also be revisited by the EU in order to play an essential role in the global economy of the future. Regardless of this, Europe remains an important trading and economic partner for all sides, simply because of its size.
This and the attractiveness as a tourist destination, especially for guests from the Far East, make hotels an excellent investment in the medium to long term. Investing in land in prime locations ensures safety, while operating through experienced management companies creates attractive returns, not only in times of negative interest rates. Just like this 3-star business hotel in Frankfurt with a guaranteed return of 5.3% over 20 years; or even 6.1% ROI for 20 years with a 3-star hotel in Stuttgart. However, the amount of such investment opportunities is getting smaller.
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