In this scenario, an economic crisis occurred in 2020 and 2021. China became very indebted, and had a large immobile bubble, and entered into a crisis of indebtedness and real estate. This also led the world to a global crisis, especially in the United States, where the tax reform of Donald Trump's government led to an increase in indebtedness, and the American debt crisis. The crisis replaced many right-wing populist governments elected in the previous decade by Keynesian center-left governments that provided a rapid economic recovery and the beginning of an era of economic growth and prosperity in the West that had not been since Post–World War II economic expansion, the New Golden Age, that lasted during the 2020s and 2030s.
The Financial Repression is being used, mainly in South American countries such as Brazil and Argentina, and makes these countries grow rapidly. It preaches negative real interest rates, government control of credit expansion (private and public), redirection of credit for productive functions, state investment, and deflation with growth. During the 20s and 30s, occurred the Latin American Golden Age, a period of major economic expansion in Latin America, motivated not only by Financial Repression but also by further economic liberalization, industrial development policies, high value-added industrial production and services, rapid improvement in education and productivity, and heavy investments that have been delayed for decades, providing a rapid increase in the quality of life and a developed welfare state on the continent, wich allowed the half of the Latin American countries became developed countries in 2040.
During the 20s and 30s, Asia's growth slows, with the reindustrialization of the West, motivated by industrial automation and national policies to reverse globalization and focus on nationally based economies, in contrast to globally based economies such as the Asian ones. Many countries in Asia seek to stimulate the domestic market and disastrous economic development, such as Indonesia and the Philippines, which have experienced debt crises and high inflation. Other Asian countries will be more successful, such as Pakistan, Bangladesh, India, and Myanmar. China will experience an economic slowdown and structural problems in the 20s. China's poor economic performance over the decade will lead to the end of Chinese Communist Party rule in the 30s.
The 2020s, despite the stability and prosperity in the West, especially in Latin America, was marked by political unrest in the Old World.
The decade begins with the Middle East Spring, a period of democratization and institutional improvement, in several countries in the northern Middle East, first in Syria, with the Syrian Constituent Assembly of 2022 and the creation of a stable democratic republic after the civil war, then in Lebanon, with the demise of the sectarian political system after a new constitution in 2023, then in Turkey, with a military coup against Turkish President Recep Tayyip Erdoğan in 2023, and then, two years after the 2021 Military Coup in Iran, the Iranian Spring in 2023, which allowed the Transition to the Second Islamic Republic by 2024 with the drafting of a new constitution that kept the Islamic Republic's institutional structure in a democracy. The Iranian Spring will give political Islam a new breath, with the reformulation of velayat-e faqih as the basis for the Iraqi, Azerbaijani and Bosnian revolutions in 2024.
In response to this new islamic revolutionary wave in the Middle East, Saudi Arabia will invade post-revolution Iraq in 2024, which will spawn the Great Middle East War, ending with Saudi defeat, one of the fuses for the biggest revolution of the decade, the Arab Revolution, which will lead to the fall of the Saudi monarchy, a war on the peninsula and the Oil Crisis of 2027 and 2028, wich reduced the global growht, especially in oil importing countries. After this crisis, the developed world is even less dependent on oil, and the world has experienced a great period of growth.
While in Western Europe there was an era of prosperity in the 2020s, in Eastern Europe the Great Balkan War took place, and the consolidation of Victor Orban's authoritarian government in Hungary.
In Africa, there were numerous development-oriented governments that take their countries from low-income to middle-income. It is at the end of the 2030s that the African development model disappears, leading to the Crisis of African Indebtedness, and hyperinflation in several African countries. It also marks the end of many authoritarian governments, and the transition of many countries to democracies. In the early 2040s, the Chinese Crisis took place, leading to the greatest global crisis of the century.
Still in 2019, the world economy was slowing down. With the prognosis of a recession in 2020, the Federal Reserve, lowered interest rates and the Trump's administration promoted tax incentives.
In China, however, the Chinese government was increasingly stimulating the economy to keep up th e high growth rate, which is steadily declining. Finally, China's real estatebubble collapses, leading to the 2020 Crisis. Meanwhile, as part of the crisis between the United States and Iran, the Iranian Navy closed down the Strait of Hormuz on 2020, leading to a temporary increase in oil demand, which helped to slow the global economy. The blockade of the Strait of Hormuz lasted a month, in which the US government had to make big concessions to the Iranian government, lifting sanctions, which was a major political defeat for Donald Trump in a election year.