Economic Crisis Or Just Another Hoax?
Is the economic crisis underway?
Over recent years, it looked as if everything was under control internationally. However, many economic and political events have occurred lately, which showed some severe signs and warnings. Will the financial crisis affect us in the next two years?
The situation in the world economy. Are our economies really stable?
Speaking generally, the world economy is slowing down at the current time. The latter is the first sign of an economic crisis in the next two years. China’s economic growth is in a slowdown, and USA annual GDP growth slowed down significantly. UK economy has significant problems with Brexit, and the German economy is slumping. Trade conflicts between the USA and China and the prolonged economic uncertainty seem to be most damaging to the global economy. According to that business, investments will be affected in one way or another.
Where to invest when someone gossips about the economic crisis?
Raised and high gold prices increasing dollar shows that investors seek to protect their assets, indicating some instability in the world economy. The interesting fact is that all this has happened over the last two years. In 2017, no one would have guessed that the gold price in September 2019 would be 43,20 Eur per gram. Get back a few years later, and you would get 32-33 Eur per gram of gold. This fact shows a clear imbalance, which is probably old news for experienced investors or economists. The investment of gold was and still is a massive opportunity if chosen wisely and patiently.
The main hoax about the economic crisis
But thinking about different perspectives, it is clear that there is a lot of speculation about the economic crisis. The bad news is that many investors believe and still listen to politically formed opinions that sometimes are so moronic that you cannot even begin to imagine. However, the problem starts when people start to think and act somehow, which is a trigger that affects investors.
Where will the next economic crisis hit?
Some analysts say that the economic crisis may start in the United States back in 2008. However, we should not forget China and the USA and, most importantly, the trade wars between them. It would be hard to believe that the economic crisis and recession would start in China. But we would not be surprised about it after all because the USA can have a powerful and crunching effect worldwide in any country.
We must not forget the UK’s Brexit too. Any uncertain political situation or decision will impact investors heavily and harshly. Investors remain calm and very cautious, at least in the UK, which means the economy may shrink harder than we initially thought. If the Brexit problem is not solved in 2019 or 2020, we may see the crisis, even in Great Britain. That would cause considerable disruptions in Europe and may have some impact worldwide.
Final thoughts
The economic crisis is a very speculative and broad subject, and it can be triggered for a reason or as a chain of events. Usually, analysts try to persuade and influence politics to take some actions, but as a rule, they do not account. When the political decisions are not made in the right and precise time, the chances to change something after that equals almost zero. This is the story of what happened in 2008 and a lot earlier. Considering everything, it is worth mentioning that whatever decisions will be made during the year 2019-2020, they must be made wisely and advisedly.
The world economy has been on a steady decline over the past decades but the steep dive it’s taking in recent years is a little mind boggling. An economic crisis at this moment will be bad for millions of people as the margin between the rich and poor will grow wider, with those at the bottom end of the spectrum taking the hit the most. We all should be hopeful that our leaders take the right steps on time to prevent an economic crisis.
Yes, you pointed out quite aptly that the differences between poor and rich will grow. It is being felt right now. Accordingly, our governments must take immediate actions or action plan to prevent this. But as usaual, there is no single an dclear answer or solution to economic problems globally.
Interesting thoughts on the potential for European Economic Crisis over the next two years. Given infrastructure highly doubt the US will see as much of a decline as in the Housing Bubble bursting over the trade wars with China but if China doesn’t play ball soon they will hurt badly from the tariffs being applied. Trade has been unfairly tilted in their favor for decades and they are, in turn, are killing the planet with heavy smog and toxic waters as well as aggression in Asian trade routes.
No country with as much injustice and slavery should ever be depended on for fairness in trade and the rest of the world seems to be turning a blind eye in favor of cheap goods. A return to quality over price is good for the world but let’s hope Europe sees that before it takes its economy down with Asia.
I totally agree that cheap goods should be of better quality. The goods from countries like China sometimes do not give much value comparing, for instance, the goods from Japan. But when paying a lot for a specific goods and in return getting poor quality products it is one of the million things which you cannot stand.
Hoax or not, it does not matter. The key, which you mentioned, is the economic uncertainty caused by geopolitical or economic events. Businesses hate uncertainty because it causes them to adjust their strategic plans and subsequent actions to meet changes in the marketplace. I think businesses react sooner to uncertainty than do consumers. We have seen a slowdown in U.S. job growth as well as manufacturers pulling back on capital spending. With the cyclic nature of the world economy, recessions are common and expected. Consequently, recessions would not be considered a crisis. However, a conflict involving Iran could be considered the impact on oil prices to importing countries like China and Japan.
Hi Tomas,
Your article certainly made me think more about the subject and thanks a lot for sharing an insightful and informative article.
I totally agree that it’s wise to invest in gold. In the part of the world where I live a couple of years before the government implied demonetization. It was a big struggle to get money from our bank account and money lost its value. Even real estate was struggling but Gold didn’t. At that point in time I realized the value of gold.
We can’t forget the 2007-2008 recession, and its impact is till to date. In the current situation, several economic indicators point towards a decline in the economy & business. Many experts are foreseeing a market crash in the near future that is way more critical and worse than the 2007-2008 financial crisis. So we need to act wisely.
You offer some very insightful reasoning and seem to have a tight grasp on world economics in general. I always enjoy reading through your posts.
I agree that decisions effecting world economics need to be made at precisely the right time in order to keep all the dominos standing and in place however, I am not certain I trust those in the position to make these decisions at the current moment. In these times of uncertainty, where do you suggest those just getting into the world of investing place their trust?
Truly, gold is a very safe and good investment to deal with, investing in Gold is profitable as its price keeps increasing over time. Economic crisis is something I believe will shows signs for a while as its a gradual process and it’s visible that it’s possible something of such rise in the international market though it’s still under research. Gold will always retain it’s golden price, but investing require patience and understanding. Thanks for this interesting and informative article, it’s useful.