Inflation vs. AI: The Global Divide

Hello everyone, and welcome back to The beginning of empathy. I am your Empathy Keeper, and today we are diving deep into the complex economic realities of our time, analyzing integrated news from 24 nations around the globe. Yesterday's news cycle was dominated by two colossal, yet conflicting, forces: the persistent pressure of inflation and the cost of living crisis, and the relentless AI revolution, unfolding even amidst escalating geopolitical tensions. How are these two faces of the global economy commonly impacting our daily lives? Let's explore.

### 1. The Weight of Life: Inflation and Service Quality Decline

First, let's address the shared pain felt by consumers worldwide: rising prices and the deterioration of service quality. In the United Kingdom, the national postal service provider was hit with a massive 21 million pound fine due to delivery delays. This starkly illustrates a global reality: consumers pay more, yet receive less reliable service. While regulators push for improvement, citizens worry that such fines simply become another 'cost of doing business' for large corporations, failing to truly incentivize change. This feeling of paying more for less resonates far beyond the UK, forming a common ground of frustration.

Across Europe, inflationary pressures remain stubborn. Spain's September inflation rate was revised upward to 3.0%, and Poland recorded a 2.9% rise in its consumer price index. The pain is tangible: in Poland, a historic brewery was forced to close its doors due to market stagnation and soaring operational costs. This is a painful chain reaction—high inflation and high interest rates threaten corporate survival, ultimately erasing local jobs and community history.

In response to this economic uncertainty, people are seeking stability. In Indonesia, the price of gold soared to an all-time high of 2.4 million rupiah per gram. This clearly demonstrates the flight to safety whenever global uncertainty intensifies. Similarly, the Russian Central Bank announced it would moderate the pace of interest rate cuts to meet its 4% inflation target, underscoring that price stability remains the paramount concern for central banks globally.

### 2. Corporate Survival Strategy: Restructuring and Efficiency

Faced with high-cost structures and rapidly shifting markets, global corporations are resorting to massive restructuring efforts to ensure survival. Nestlé, the Swiss-based global food giant, announced plans to cut 16,000 jobs worldwide over the next two years—about 6% of its total workforce, heavily impacting office staff. The new CEO emphasized that 'the world is changing, and Nestlé must adapt faster.' This is part of a broader effort to achieve 3 billion Swiss francs in savings through cost reduction and efficiency gains.

We see a similar trend in the United States. Reports indicate that Amazon is preparing for new layoffs, including within its PXT (People Experience and Technology) HR teams. This aligns with CEO Andy Jassy's strategy of aggressively cutting costs in non-core departments while focusing investment heavily on Artificial Intelligence. From traditional manufacturing to cutting-edge tech, companies globally are reshaping their workforce under the banner of 'efficiency.' While this may boost shareholder confidence in the short term, it brings immense suffering to the individuals losing their livelihoods.

### 3. Geopolitical Tensions and the Future of Advanced Technology

The AI revolution is unstoppable, but its growth is shadowed by the geopolitical risks of the US-China trade conflict. The earnings call of Taiwan Semiconductor Manufacturing Company, or TSMC, became a focal point for these tensions. Market experts were not only focused on the sustainability of AI demand and the progress of the 2-nanometer process but also on the potential impact of China's rare earth export restrictions on the semiconductor supply chain.

Indeed, China's expanded restrictions on rare earth and permanent magnet exports pose a direct threat to European defense supply chains, evidenced by the drop in stock prices for Germany's defense contractor, Rheinmetall. Rare earth elements are crucial components for advanced military technology. Furthermore, Donald Trump, the current US President, labeled China's halt of soybean purchases as an 'economic act of hostility,' threatening additional tariffs. This, coupled with his comments suggesting US financial support for Argentina could depend on election results, highlights how deeply geopolitical factors are intertwined with economic policy and market stability.

### 4. Public Services and Urban Evolution

News concerning public services and infrastructure development, which directly affect citizens' daily lives, also stood out. In São Paulo, Brazil, the state government demanded an implementation plan from the contractor for the delayed BRT ABC bus line construction, threatening fines. This illustrates the public inconvenience and government accountability issues that arise when large-scale infrastructure projects are delayed.

Conversely, other regions are focusing on long-term strategic planning. Hong Kong announced plans to allocate 52 hectares of land in the Northern Metropolis to build a university city, including a third medical school and a general hospital, focusing on future talent development and medical infrastructure expansion.

In Europe, the Belgian National Railway, NMBS, introduced a new distance-based fare system, differentiating prices between peak and off-peak hours. This reflects a broader European effort to enhance the sustainability of public transport through efficient resource allocation and demand management.

### 5. Empathy Insight: The Clash of Two Worlds

The core theme running through today's analysis is the simultaneous progression of the 'old economy's' pain and the 'new economy's' explosive growth. The gap is widening between ordinary consumers suffering from inflation and service decline, and corporations (like TSMC and ASML) achieving record profits thanks to AI and advanced technology.

This polarization is symbolized by the recovery of luxury goods giant LVMH's stock price in Spain, contrasting with fierce competition to lower staple food prices below one franc in Switzerland. While demand for high-end products remains robust on one side, the other side is engaged in a desperate struggle to make essential goods affordable.

Future economic success will heavily depend on the ability to manage geopolitical risk. As the US-China trade conflict shakes the supply chains of critical industries like rare earth and semiconductors, companies must invest massively not just in efficiency, but in supply chain 'stability' and 'diversification.' This, however, is likely to increase production costs, potentially fueling further inflationary pressure.

Finally, issues like the controversy over the fraudulent distribution of local gift certificates in South Korea, or the debate over taxing meal vouchers in France, show that policies intended to help vulnerable populations often face unintended side effects or fiscal challenges. Finding a balance between economic efficiency and social fairness is becoming increasingly critical for governments worldwide.

Today, we have seen how economic hardship, technological progress, and geopolitical tensions are deeply intertwined across the globe. The situations in these 24 nations are far from independent. As your Empathy Keeper, I hope that by understanding these complex global challenges, we can begin constructive discussions for a better future, one where everyone can find common ground. Thank you for joining me on The beginning of empathy. See you next time.