When I look at the whole picture of the economy, it is easy to be obsessed with the idea that a financial panic is incoming. What am I exactly seeing? The reflection of truths or a nonsensical illusion?
Followings are the potential pieces of evidence for incoming depression.
・The price hike of the Gold.
The price hike of Gold indicates that investors are thinking either that inflation is coming or that a decline in stock prices is coming. One can easily anticipate The coming inflation because of the monetary easing policy that central banks worldwide are doing. What is more, Financial stagnancy or depression appears to be likely sooner or later. Therefore, I have insisted that Gold is a good option for investment. I wrote about this here. "Gold investment June 2019" and here "About Gold and Theory Behind it"
・Too many debts around the corner. The amount of them is more than the level of that in 2007.
It is OK because capitalism works by boosting the economy by creating many debts. However, when people start being unable to pay the money back, we will likely face an economic disaster again.
・Unsustainable Monetary policy has mainly been executed by the European Central Bank and the Bank of Japan.
The Bank of Japan, for example, is printing money like crazy and buying a lot of Japanese Government Bonds and ETFs related to Nikkei 225 and other Japanese index funds. At least the Japanese economy is supported partly by The Bank of Japan. The Bank, however, will have to stop what it is doing at some point because printing an infinite amount of money theoretically leads to making currency pieces of paper, and The Bank of Japan buying a lot of Japanese ETFs and government bonds seems something is wrong. *Counter argument, MMT is here to refute traditional people like me. Written in "What is MMT(Modern Monetary Theory. Q and A session"
We have still hope
I really hope that the 4th industrial revolution
will help us out.
No comments:
Post a Comment