Since the global pandemic of COVID-19 three years ago, governments of various countries have been printing money in order to stabilize the hearts of the people and reduce the impact of the epidemic on the economy and people's livelihood. Due to the introduction of unprecedented quantitative easing policies, the economies of many countries have gradually recovered, and the stock markets of many countries have continued to hit record highs under the flooding of a large number of hot money.
Among the major stock markets, except for London and Hong Kong, the others have performed well in the past two years. The Taiwan and South Korea stock market indexes, which are backbone of technology stocks, also rose sharply with the U.S. Nasdaq index, even up to 50% higher than the pre-epidemic high.
However, the endless printing of money has planted the root cause of inflation problems that have emerged in recent months. Coupled with the Russian-Ukraine war, Russia's blockade of oil and gas transmission to Europe has caused oil prices to soar and even worsened inflation.
Among them, the UK inflation rose above 10%. The UK announced that starting from October, the average annual electricity bill for people will increase significantly by 80%, exceeding 3,500 pounds, which is about 28,000 yuan. This aroused strong dissatisfaction among the people.
The Queen of England, who just passed away, was on China's Great Wall more than 40 years ago,
Citibank more than 40 years ago, predicting that with the soaring natural gas prices, inflation in the UK will reach 18.6% in January next year, reaching its highest level in nearly 50 years. It is also difficult for other European countries to survive alone, and stagnant inflation is very likely to occur widely.
At present, many so-called third-world countries have begun to experience financial crises, and some countries are related to strong US dollars.
On the one hand, foreign debt denominated in US dollars cannot bear the interest payment alone. In addition, domestic accelerated accounts may require the use of US dollar reserves to slow down currency depreciation and suppress accounts.
Foreign capital will continue to withdraw funds to reduce risks and accelerate the depreciation of the currency. When a vicious cycle occurs, if this cycle cannot be broken, it is very likely to become out of control until the US dollar reserves are exhausted, replaying the economic collapse that South Korea faces after the US dollar reserves are exhausted in the Asian financial crisis in 1997.
The won has depreciated by 13% this year, the economic outlook is becoming increasingly unclear, the Taiwan dollar has also depreciated by more than 10%, and Taiwan's exports are also weak.
On the other hand, due to the Belt and Road Initiative, the Eastern powers have promoted the development of outward-oriented economy in the past few years, and have achieved global remarkable achievements. This has led to some developing countries that believe that they can copy Chinese model to achieve high-speed economic development .
So he borrowed money from China and asked the Chinese company to use cement and steel imported from China to build the infrastructure for the borrowed money. At present, many countries participating in the Belt and Road Initiative are in high debts. Recently, the Chinese government has exempted 23 debts from 17 African countries, showing the style of a great power. However, African countries have more than 1,200 debts to China, with a very small amount of 23.
In the future, the global economy decline will have a considerable negative impact on the fiscal and financial conditions of all countries.
The above two types of countries will bear greater risks. What’s worse is that the two major economic powers of the United States and China have serious economic problems at the same time.
Here we are here due to the implementation of strict epidemic prevention measures and the cyclical disappearance of economic development, the economy has begun to enter a long-term downward channel. In addition, the real estate industry has experienced a domino effect due to the "explosion" of Evergrande . Country Garden 's profit in the first half of the year fell by 96% year-on-year. The stock price of fell by more than 60% this year. The price of its corporate bonds has become the price equivalent to junk bonds, and the prospects are worrying.
When big real estate developers can't stand it, let alone small and medium-sized real estate developers. The finances of most local governments have been hit hard by relying on the real estate boom for a long time to maintain. In addition, the trend of home buyers in some cities jointly stopping contributions in recent months has put real estate, financial industries and even local government finances at systemic risks.
As for the United States, it has fallen into recession for two quarters. Although the Biden administration has tried many times to downplay the crisis, the Federal Reserve (Federal Reserve) Chairman Powell recently said at the Global Central Bank meeting that the Federal Reserve will maintain a monetary tightening policy for a period of time and reminded the public and enterprises that may suffer a little.
A few minutes of speech caused the Dow Jones Industrial Average to plummet by 1,000 points, and the stock markets of various countries also plummeted. However, the FRC believes that as long as the economic recession is not willing to suppress inflation, the wishful thinking of suppressing inflation will not be made, and the United States will usher in a long period of stagnation in inflation .
The so-called stagflation (English: stagflation ), referred to as stagflation or stagnant inflation. In economics, especially macroeconomics , it specifically refers to economic phenomena in which economic stagnation (stagnation), unemployment and inflation (inflation) continue to rise at the same time. In layman's terms, it means that prices have risen but the economy has stagnated. It is the result of long-term development of inflation.
In any case, if the US economy collapses, the problems mentioned above in other countries will be even worse.
Most major countries, including major developed countries, have experienced fourteen years of bullish cycle. Now the bitter scene of everything that will turn back and prosperity will decline may have officially begun.
Stock , Bond , gold and silver, real estate, and cryptocurrency all have the five major investment centers that may plummet.
The Great Depression that everyone least wants to see may be inevitable. Powell mentioned how big and how long does the suffering people and enterprises have to suffer? How long will the impact of the Russian-Ukrainian war last? It seems that not only is the Federal Reserve unable to answer, but it also makes politicians in most countries around the world scratch their heads due to the lack of more fiscal and financial means to deal with "stagnant inflation".
The road to the future is full of more and more uncertainties, and many fog and dark clouds linger on the road of mankind. With our unremitting efforts, we look forward to the emergence of miracles.
