At the moment, following the UK referendum, people are busy studying the tea leaves to find out what is coming down the tracks.
Friday’s IMF downgrade of its economic forecasts, combined with data pointing to a sharp drop in UK business confidence has revived fears concerning the economic implications of the result. The picture may be more nuanced.
The FTSE 100 made up of companies drawing their income largely from abroad is trading 6% ahead of where it was on referendum day while the more domestically exposed FTSE 250 is just 2% off. Hardly Armageddon.
True, the decline of over 10% in Sterling against its main trading partners points to a sharp overall downgrading of the value of UK assets.
Irish exporters and firms exposed to competition from Britain are certainly not counting their chickens, these days. But from the top floor of the European Central Bank HQ in Frankfurt, the view is rather different.
The President, Mario Draghi, has seen off, or at least, parked, crisis after crisis, most of them related to the banking sector, or to the economic struggles on Europe’s periphery.
Draghi and his fellow central bankers may consider that for the time being, at least, it is in the world of politics that the real sources of turbulence are to be found.
Over the past 18 months, across Europe, the pace of terrorist activity has picked up while the migrant crisis has worsened, at least up to the point when Germany’s Chancellor, Angela Merkel, entered into a shaky deal with the Turkish President Erdogan.
The EU’s most experienced leader is on the defensive with an anti-immigrant party polling now at around 15%.
In Holland and France, anti-EU parties are on the rise. This has been paralleled by the backlash among voters against globalisation.
Terrorist outrages combined with the fear of mass migration, apparently tipped the balance in favor of Brexit, but at its heart, the rejection was the economic neglect of communities. Surveys point to increased levels of nationalism and a dropping off in inter-country solidarity across the EU.
Here, it is worth looking at some key trigger events that have, in the past, led to huge political and economic consequences.
In December 2010, a street seller, Mohammed Bouaziz, burned himself alive. His action triggered the wave of protests across the Arab world known as the ‘Arab spring’.
Within six months, Syria was in flames and the greatest movement of refugees since WWII had been triggered.
But the rage that erupted in a small town near Tunis did not come from nowhere: The Arab world for reasons cultural and institutional has lost out from globalisation. Its autocratic regimes have failed to generate employment for its burgeoning youth populations.
Exports of manufactured goods from the Middle East and North Africa have stagnated, at between $10bn and $15bn in 2005.
The decisions of politicians can have huge consequences. A good example is the visit, engineered by Henry Kissinger, of his president, Richard Nixon to Chairman Mao in 1972.
The ensuing detente triggered the great economic reforms that began to unfold under Mao’s successor, Deng Xiao Ping.
The fall of the Berlin Wall led to the absorption of Eastern Europe into the EU, triggering population movements which a dozen years later may have pushed the UK towards exit from the EU.
The seminal event of the late 20th century has to be China’s incorporation into the global economy. Now, it is China’s turn to binge and we ponder the possible consequences.
In 1914, an earlier generation of politicians, monarchs and military screwed up big time. Germany was the country’s second largest economy on the eve of an eminently preventable war.
Within two years, food shortages affected the key protagonists, with inflation in Britain reaching 25%.
A defeated Germany experienced hyperinflation. Many were wiped out financially as money was transported in wheelbarrows. The destruction of the middle classes paved the way for Hitler.
To this day, Germans have a dread of runaway inflation and this has influenced the thinking of its elites as well as that of ordinary people on the street.
The rise of Trump calls to mind another generation of American politicians who believed in cracking down on free trade.
These politicians also ensured that the US Congress after World War 1 failed to provide necessary backing for reconstruction in Europe, a decision which helped undermine the Weimar Republic.
Later, a generation of politicians and officials learned of the benefits of Government intervention, but you can have too much of a good thing.
Excessive government spending combined with the inflationary impact of the Vietnam War left the West exposed to retaliation from OPEC during the conflict between Israel and Egypt.
It also led to a collapse of the financial world order established at Bretton Woods in 1944. The great inflation of the 1970s was unleashed, with annual price rises peaking at 25% in Britain by the start of the Thatcher era.
In truth, great political and economic events come in waves, feeding off each other, generating unexpected reactions.