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Polycrisis: Economic Uncertainty in the Multiple-Crisis Era

Isaac Nuriani    |
Jan 19, 2024
  • Multiple, persistent crises are complicating the global economy.
  • New research suggests gold could help mitigate crisis impacts.
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Lately, there has been renewed optimism about prospects for precious metals heading into 2024. A big part of the reason for that has been anticipation that central banks – the Federal Reserve, most notably – will pivot to a posture of accommodative monetary policy as signs grow that the worst of inflation is squarely behind us and will return to the universal 2% target in the foreseeable future. 

But 2024 could provide a justification for metals investing outside of the singular and strategic “angle” of trying to capitalize on gold and silver’s anticipated price reactions to a possible return to easy – or at least easier – monetary policy. 

That justification? The polycrisis. 

“Polycrisis” is the name that’s been given to the one overarching, or macro, crisis that is the product of several other more discrete crises occurring at the same time. Think of it as the crisis of crises.  

In truth, it’s not difficult to make the case that a polycrisis has existed for years now. In an October 2022 article that shared former Treasury Secretary Larry Summer’s frustration at what he then felt was policymakers’ inaction in addressing the multiple crises besetting the global environment, the Washington Post outlined multiple global crises concerning Americans: 

Just two years after the pandemic recession, the global economy confronts an evolving set of threats. Higher interest rates needed to battle decades-high inflation are causing investors to rethink their holdings, leading to volatile trading. War between Russia and Ukraine has sent prices soaring for grain and fuel. And relations between the United States and China, the world’s two largest economies, seem to worsen each day.[1] 

“This is the most complex, disparate and cross-cutting set of challenges that I can remember in the 40 years I’ve been paying attention to such things,” Summers said at the time.[2] And his expression of frustration is itself a strong description of the polycrisis. 

Institutional analysts are anticipating the intensification of polycrisis component conditions throughout 2024, potentially creating even greater uncertainty and generating even greater volatility than that which has been in evidence recently. 

This week, we’re going to examine some of the key components of the current polycrisis cited in a new report by the U.S. Chamber of Commerce Foundation. The chamber is just one of many organizations that says a polycrisis is in play and poised to intensify in 2024.  

We’re also going to take a look at the role precious metals potentially can play in mitigating the impacts of a polycrisis. We’ll look, in particular, at an analysis recently completed by global investment manager Sprott that suggests gold could provide a material benefit as a hedge in crises of varying catalysts and dynamics. 

First up, though, there’s the matter of better understanding the current polycrisis, including gaining a greater familiarity with several of its key components. 

Let’s start with that. 

Most Prominent Risks of the Polycrisis 

In a recent report titled Navigating the Polycrisis, the U.S. Chamber of Commerce Foundation listed a wide array of global risks it says are principal components of the polycrisis – 2024 edition. 

Among the specific risks indicated are those with which you already might be familiar, such as persistent inflation and the threat of recession. Others noted by the chamber might be less apparent, such as multipolarity, which refers to the capacity of smaller, unaligned nation-states to exert outsized influence on the global stage, particularly if they have influence across the “energy value chain.”[3]   

But what all of the polycrisis component risks named by the chamber seem to have in common is that each is, by itself, of such size and scope that it would justify risk-mitigation efforts on its singular behalf. Which suggests the possibility that preparations are all but essential to withstand the impact of a polycrisis – a crisis essentially woven together from multiple such crises. 

To perhaps gain a better idea of what I’m talking about, let’s take a closer look at the top three of those component risks listed by the chamber. 

Polycrisis Risk #1: Deteriorating Outlook for Business 

Leading off the chamber’s list of polycrisis risks in 2024 is a substandard outlook for businesses around the world. 

Validating that concern, multinational financial giant Allianz suggests corporations will find themselves beset by numerous interlocking challenges this year. Notably, many of the challenges facing businesses – such as ongoing inflation and higher interest rates – are also stand-alone risks the chamber says are components of the broader polycrisis.[4] But the capacity of these risks to collectively and synergistically make life more difficult for businesses results in the private sector itself becoming yet another component of the polycrisis. 

The same could be said of geopolitical tension. “Businesses and their supply chains face considerable geopolitical risks with war in Ukraine, conflict in the Middle East, and ongoing tensions around the world,” notes Allianz. “Political risk in 2023 was at a five-year high, with some 100 countries considered at high or extreme risk of civil unrest.”[5] 

In other research conducted last year by Oxford Economics, businesses said geopolitical tension is the biggest threat to their success, presently. Additionally, 60% project it will continue to be a “very significant risk” over the next half-decade.[6] 

The upshot of the pressure exerted collectively on businesses by these economic and geopolitical factors could be a significant increase in failed businesses this year. Allianz forecasts that “three out of five countries will reach pre-pandemic business insolvency levels by the end of 2024, including large markets such as the U.S. and Germany.”[7] 

In fact, recent data compiled by business analytics firm Epiq shows that commercial Chapter 7 (liquidation) filings rose in the U.S. by nearly 20% last year, while Chapter 11 (reorganization) filings were up 72% in 2023.[8] Allianz says it expects to see the number of insolvent businesses in the U.S. rise by 22% in 2024.[9] 

Polycrisis Risk #2: Financial/Fiscal Instability 

The U.S. Chamber of Commerce Foundation also identifies the seemingly unrestrained accumulation of debt at all levels as another risk that stands to worsen in 2024, potentially intensifying the impact of the polycrisis. 

“Since the Great Recession, U.S. household debt has grown from $12 trillion to $17 trillion, an increase of $5 trillion,” global wealth managers Stifel noted in October. “U.S. nonfinancial corporate debt has risen from $6 trillion to $13 trillion, up $7 trillion…and U.S. government debt has increased from $9 trillion to $33 trillion, a rise of $24 trillion.”[10] 

Those totals likely are headed higher this year. We certainly know that federal debt continues to surge upward. Since Stifel outlined these debt levels in October – just three months ago – Uncle Sam already has racked up another $1 trillion in obligations, putting the national debt now at just above $34 trillion.[11] What’s more, through just the first three months of fiscal year 2024, the annual budget deficit is on pace to top $2 trillion, which would make it the third-highest deficit in history.[12] 

“The significant buildup of debt since the Great Recession and higher rates are leading to a fiscal transition,” Stifel noted more recently in its 2024 Outlook, “putting pressure on consumers, corporations, and governments.”[13] 

Polycrisis Risk #3: Heightened Geopolitical Tension 

Unsurprisingly, geopolitical risk features prominently on the U.S. Chamber of Commerce’s list of polycrisis components. I say “unsurprisingly” because it seems to be a presence on everyone else’s list, as well. 

“Geopolitical risks have returned to center stage, with the war between Israel and Hamas, the prolonged Russia-Ukraine conflict, and the ongoing U.S.-China tensions,” S&P Global recently noted in its own outlook for 2024.[14] 

The breadth of geopolitical risks right now seems almost limitless, especially if one takes to heart these concerning projections of the 2024 geopolitical landscape by Time: 

“In 2024, Russia, North Korea, and Iran will boost one another’s capabilities and act in increasingly coordinated and disruptive ways on the global stage. Meanwhile, even Washington’s friends—the leaders of Ukraine, Israel and (potentially) Taiwan—will pull the U.S. into confrontations it wants to avoid.”[15] 

There’s more. Casting an eye to the wave of electoral processes that will sweep across the globe this year, S&P points out that “2024 will also feature more than 70 elections in 50-plus countries whose outcomes could add complexity to already strained international and domestic dynamics for many countries.”[16]  

Touching on the range of implications throughout, S&P suggested, “This increased geopolitical fragmentation affects corporates and governments in their strategies for supply chain and energy security, with potential broader implications on food prices, global trade, and inflation—while increasing the potential for event risk.”[17] 

What Now? 

Even a relatively cursory look at the risks that – in the view of the U.S. Chamber of Commerce Foundation – make up the polycrisis seems to illustrate how potentially potent each is on its own and how especially potent the “sum of the parts” could be as a macro crisis or “polycrisis.” 

If one accepts that, the next logical step might be to consider how to neutralize the broad threat, to the extent possible. 

“Innovative collaborations are essential as traditional operations falter amid “polycrisis,” the chamber suggests. “Strategic foresight spotlights urgent needs for government and industry to secure prosperity, overcoming division to address hybrid threats.”[18] 

And there may be a beneficial role to be played by a societally fundamental and systemic approach to managing polycrisis and its impacts. But that doesn’t mean those charged with the responsibility of overseeing critical financial resources – everyone from individual investors to the world’s central banks – must stand by idly waiting for a “macro” solution to polycrisis that may never come. For them, there is the option of finding solutions designed to better optimize and secure their portfolios in the face of polycrisis. And one of those options could be the inclusion of precious metals among their base of assets. 

Let’s touch on that as we wrap up this week. 

Sprott: “Gold Has Proven Its Value as a Safe Haven Asset” 

Although not referring to “polycrisis” by name, a recent report by global investment manager Sprott on the potential utility of gold in crises clearly suggests that multiple crises have been in play simultaneously over the last two years. And just as it has during the numerous other crises that have been features of the global landscape over the last decade and a half, gold has performed capably as a “safe haven investment,” in Sprott’s view, through this latest period of considerable uncertainty. 

“The current crisis began in early 2022 with Russia’s invasion of Ukraine,” Sprott clarifies, “and has continued into 2023, with the Q1 banking crisis and the Q3 Middle East crisis. As with past crises, gold has provided a safe haven investment compared to more traditional asset classes.”[19] 

Sprott determined that there have been seven crisis periods since 2007: global financial crisis (2007-2009); Eurozone crisis/flash crash (2010); U.S. sovereign debt downgrade (2011); China yuan devaluation (2015-2016); Fed hike/U.S.-China trade war (2018); COVID-19 pandemic (2019-2020); and the Russia-Ukraine war to Israel-Hamas war (2022-2023). And that, on average, through all seven crises, gold bullion has returned 12.72%, well in excess of the returns lodged by other, more “mainstream” asset classes during these same periods.[20]  

“During the seven crisis periods since 2007,” Sprott summarizes, “we believe gold has proven its value as a safe haven asset.”[21] 

Sprott’s analysis and associated conclusions could be helpful in the context of a polycrisis structure projected to grow firmer in 2024. The reason for that has to do, in part, with the breadth of crisis orientations examined by Sprott: from worldwide financial crisis, to fiscal crisis, to health crisis…to trade wars and even actual wars. 

By definition, polycrisis is made up of multiple crises that may have overlapping considerations but which also are characterized by standalone catalysts and dynamics. The Sprott research implies the potential suitability of gold, including gold IRAs, as a risk-mitigation asset is due to the metal’s capacity to offset impacts from multiple risk sources.  

The current global economic and geopolitical environment appears to be fertile territory for crisis generation; that so many crises appear so regularly and exist simultaneously is proof of that. Accordingly, having a highly accessible asset option that offers the potential to mitigate multiple-crisis impacts could prove valuable. 




[1] David Lynch, Washington Post, “Summers blasts IMF, World Bank for inaction amid growing dangers” (October 14, 2022, accessed 1/18/24). 
[2] Ibid. 
[3] EY Parthenon, “The new world in 2024” (December 2023, accessed 1/18/24). 
[4] Allianz, “Key risk trends for Directors and Officers in 2024: Allianz” (December 13, 2023, accessed 1/18/24). 
[5] Ibid. 
[6] Sumathi Bala, CNBC.com, “Geopolitical risks are a top global threat to businesses, survey finds” (August 2, 2023, accessed 1/18/24). 
[7] Allianz, “Global Insolvency Outlook 2023-25: From maul to ruck?” (October 18, 2023, accessed 1/18/24). 
[8] Vincent Ryan, CFO.com, “Chapter 11 Bankruptcy Filings Rose 72% in 2023” (January 10, 2024, accessed 1/18/24). 
[9] Allianz, “Global Insolvency Outlook 2023-25.” 
[10] Michael O’Keeffe, Stifel, “Troubling Forces Converge: We’re Headed to a Fiscal Transition” (October 6, 2023, accessed 1/18/24). 
[11] Fatima Hussein and Josh Boak, AP News, “US national debt hits record $34 trillion as Congress gears up for funding fight” (January 2, 2024, accessed 1/18/24). 
[12] Department of the Treasury, “Monthly Treasury Statement” (December 2023, accessed 1/18/24); FiscalData.Treasury.gov, “What is the national deficit?” (accessed 1/18/24).  
[13] Stifel, “Outlook 2024: Embracing Change” (accessed 1/18/24). 
[14] S&P Global, “Global Credit Outlook 2024: New Risks, New Playbook” (December 4, 2023, accessed 1/18/24). 
[15] Ian Bremmer, Time, “The Top 10 Global Risks for 2024” (January 8, 2024, accessed 1/18/24). 
[16] S&P Global, “Global Credit Outlook 2024.” 
[17] Ibid. 
[18] Michael Carney, U.S. Chamber of Commerce Foundation, “Navigating the Polycrisis: Global Risks and Opportunities Lie Ahead in 2024” (January 12, 2024, accessed 1/18/24). 
[19] Sprott, “The Case for Gold in Crises” (accessed 1/18/24). 
[20] Ibid. 
[21] Ibid. 

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