Coincidence or rerun? - critical summary review

There's an uncomfortable exercise most people avoid. Looking back... a hundred years back... and realizing that faces change, names change, technology changes... but the script insists on repeating itself.

Nineteen twenty: the world just came out of a pandemic that killed tens of millions. A war redrew borders. The stock market threw a party. Everyone bought stocks on credit. And ten years later, the whole thing collapsed.

Two thousand twenty six: the world just came out of a pandemic that froze the global economy. Wars are popping up in over thirty countries. The stock market threw a party. Everyone bought artificial intelligence stocks. And now... well, this part is still being written.

Coincidence? Maybe. But there are too many coincidences to ignore.

Let's start with the virus. The nineteen eighteen pandemic infected roughly five hundred million people... a third of humanity. It killed between forty and fifty million, according to the National Bureau of Economic Research. To put that in perspective: if a pandemic with the same mortality rate happened today, it would mean one hundred and fifty million dead.

The economic hit? According to the same study by Robert Barro and coauthors, the pandemic reduced real GDP per capita by six percent and private consumption by eight percent across the countries analyzed. Numbers comparable to the two thousand eight financial crisis.

COVID nineteen kept pace. Global GDP fell three percent in two thousand twenty, the sharpest contraction since the Great Depression. The World Bank calculated that the real impact, compared to pre-pandemic projections, was five point eight percent... seven point four trillion dollars wiped out in a single year.

Both pandemics follow the same script: disease spreads, governments hesitate, the economy stalls, and when the virus leaves, the economic scars last far longer than the physical ones. But no pandemic merely ends a health crisis. Each one opens the door to what comes next.

And what came after nineteen eighteen was a party. The American GDP grew forty two percent during the twenties. The Dow Jones jumped from sixty three points to three hundred and eighty one. Radio entered sixty percent of American homes. Ford's assembly line cut car production from twelve hours to ninety three minutes. Easy credit made everyone feel like a millionaire. Brokers lent up to ninety percent of a stock's value. By nineteen twenty nine, there was more money on loan for speculation than currency in circulation in the entire country.

Now look at two thousand twenty five. The S&P five hundred climbed sixteen percent, pulled by the tech giants. Nvidia became the most valuable company in the world... four trillion dollars... selling the chips that power artificial intelligence. Amazon, Alphabet, Meta and Microsoft spent nearly three hundred billion dollars combined on AI infrastructure. The Case Shiller indicator, which compares stock prices against inflation-adjusted earnings over the past ten years, crossed forty for the first time since the dot-com bubble in two thousand.

In the twenties, it was electricity. Today, it's AI. The technology changes, but the choreography of euphoria is the same: a real innovation shows up, money pours in faster than results, and the gap between investment and return becomes a canyon.

And what a canyon. A study by MIT Media Lab in two thousand twenty five showed that ninety five percent of organizations got zero return on generative AI investments. OpenAI projected thirteen billion dollars in revenue for two thousand twenty five... with an eight billion dollar loss. For two thousand twenty six, it expects to lose seventeen billion. Sam Altman, OpenAI's own CEO, admitted in two thousand twenty five that he believes a bubble is underway. Ray Dalio, from Bridgewater, the world's largest hedge fund, said the moment is "very similar" to the dot-com bubble.

While markets celebrate, the world is on fire.

ACLED, the leading global conflict monitoring database, recorded over two hundred and four thousand conflict events in two thousand twenty five, with at least two hundred and forty thousand deaths. That's twenty three percent more than the previous year, according to the International Institute for Strategic Studies. The war in Ukraine entered its fifth year. In Gaza, over twenty one thousand killed in twelve months. In Sudan, fifteen thousand. Israel and Iran entered direct confrontation. India and Pakistan had their worst armed clash in decades.

The International Crisis Group described two thousand twenty six as "a dangerous new era." The Council on Foreign Relations gave a fifty percent chance of a Taiwan Strait crisis or a Russia-NATO clash this year.

A hundred years ago, World War One had just redrawn the map. Empires fell. Borders were sketched by diplomats in closed rooms. The Treaty of Versailles humiliated Germany and planted the seed for the next war.

Today, the United States' own two thousand twenty five National Security Strategy acknowledged that "the days of the United States propping up the entire world order like Atlas are over." The postwar trade system is unraveling. Since two thousand twenty, eighteen thousand discriminatory trade measures have been introduced worldwide, according to UNCTAD. Protectionism is back in force... and anyone who knows the story of the Smoot-Hawley tariffs of nineteen thirty knows how this can end.

And inequality is the glue that holds it all together.

In nineteen twenty eight, the richest one percent of Americans took twenty four percent of all income. Today, according to the OECD, that same one percent holds forty point five percent of all national wealth. The two thousand twenty six World Inequality Report, edited by Chancel and Piketty, delivers a number that should be front page news everywhere: sixty thousand people... the top zero point zero zero one percent of the planet... own three times more wealth than the poorest half of humanity combined.

When the two thousand twenty pandemic hit, billionaires saw their wealth grow by three point nine trillion dollars, according to Oxfam. Over the same period, workers worldwide lost three point seven trillion in combined earnings, according to the International Labour Organization. Crisis pushes the bottom further down and the top further up. A hundred years and the mechanism hasn't changed.

And debt? Governments and companies will borrow twenty nine trillion dollars in two thousand twenty six, according to the OECD. Double the amount from ten years ago. It's fuel for growth in good times and gunpowder in bad ones.

The question nobody wants to ask is: are we sitting on a powder keg?

The honest answer is: it depends on who's holding the match.

The Great Depression wasn't inevitable. Economic historians argue that bad policy decisions... sticking with the gold standard, protectionist tariffs, passive central banks... turned a manageable recession into a catastrophe. The two thousand twenty pandemic didn't become a depression because governments injected trillions in stimulus.

Today there are tools that didn't exist before. Better-prepared central banks. Vaccines at record speed. Instant communication. But there are also unprecedented risks. Nuclear weapons in more hands. Algorithms that amplify market panic in milliseconds. And a concentration of economic power in a handful of tech companies that has no parallel in history.

The hundred-year pattern isn't one of exact repetition. It's one of rhyme. A pandemic exposes fragilities. Technological euphoria masks imbalances. Inequality erodes the foundation. Conflicts consume resources. And at some point, the bill arrives.

But the bill doesn't have to be paid the same way. As long as we stop pretending it doesn't exist.

What to do with this information

Scenario one... Soft landing. AI starts delivering real returns. Conflicts de-escalate. Central banks ride the wave. The economy grows slowly, but it grows. Those who diversified across fixed income, equities and international assets sleep well. The strategy here is patience and diversification.

Scenario two... Sharp correction. The AI bubble partially deflates. Overvalued companies lose thirty to fifty percent. Trade tariffs trigger a global slowdown. Those with emergency reserves in liquid assets... cash, short-term bonds, daily-liquidity funds... ride out the turbulence without panic selling. History's greatest fortunes weren't built during rallies. They were built on purchases made during the crashes.

Scenario three... Systemic crisis. Military escalation, bank collapse, supply chain rupture. Low probability, high impact. The preparation is simple: an emergency fund covering six to twelve months of fixed expenses. Pay down high-interest debt. Know where every cent is invested. And never depend on a single source of income.

Across all three scenarios, the same rule applies: quality information is the best asset there is. Understanding the landscape means you don't need to predict the future. You just need to be ready for more than one outcome.

History doesn't ask for proof that you knew what was going to happen. It asks for proof that you prepared for what could happen.