Inflation 5.40
Inflation is such a sneaky enemy that you cannot notice it until it overtakes every single asset around you. The wave of inflation has been a long-expected and inevitable thing for the global economy. The countries, especially the developing countries that are ruled by unskillful leaders, has been dealing with this problem for several years. To be honest, none of them was as frightening as the inflation rate in United States.
The value we attribute to USD as a currency can never be underestimated. Due to the actions taken by people in times of financial risks, USD is viewed as a safe heaven for a short term until everything settles down. This actions may not be bearable for developing countries especially when there is a global fear, uncertainty and doubt...
While there are tens of national currencies that are fighting against inflation to save their purchasing power, it will never be easy as before after the recently published rate of inflation in US. Why does it matter for many people?
In the case of strong USD: People sell their fiat currencies for dollar because it either saves its power or it loses its power the least compared to the other. What's good? At least the dollar system is safe.
In the case of weak USD: The things get complicated. Remember the times of 2018 or let's go back to 70's when the USD was set free. These times are like hell for the other countries where their salaries paid in national currencies and they are no longer enough to pay for the expenditures (since they are calculated according to dollar in most cases). Every single day, I see the desperate expression on the faces of people as they feel like a rat in a maze. It's more common for the younger generations who are losing their hopes for better future.
How about the rest of the world?
It will not be different from this chart IMO. Let's assume that Euro will be one of the strongest currencies that can go against the wave of inflation, what about the rest of the world in which many people have been renouncing their life quality? It will be terrible.
Honestly speaking, I'm terrified with the chart that I am looking at. We have always speculated about the possibility but experiencing the futuristic projections is hard to cope with.
Key is obvious: Crypto
It's nearly undeniable that many people earn more thanks to crypto than their salary. The paradigm shift will, as expected, harsh but there will be millions of people who can support their family budget thank to crypto. I have many friends from Africa and Asia who are earning more than the minimum wage in their homelands.
Will it be the solution?
To some extent.
YET
We are supposed to be more cautious about our financial plans and expenses regardless of the place where we live in. There are Zombie Companies that can only afford to pay the minimum amount of their loans all around the world. Just a sparkle has a potential to burn everywhere. Normally, I was planning to create a post about the success of Axie Infinity and the new De-Fi powered game Cometh and my experience. YET, I cannot forget the chart somehow. Staying above %5 again is not a good signal...
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My forecast is this is the peak print we will see on inflation. In fact, I feel certain we will see a slowing (again) in the velocity of money when the second quarter numbers are released.
By the end of the year, you will see the inflation print much lower. We will lucky to see much global growth in 2022. That is how bad things really are.
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It's quite likely to happen dear.
The point is that I do not see any developing country that can resist against a stronger dollar scenario. Social and political problems are growing day by day and the main reason is money as usual. It's like no sum game.
I hope to see global cooperation to deal with the Avalanche of debt in developing countries. The system is hardly operating 😑
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I totally agree with you. Some people are now looking into cryptocurrencies as the potential savior. That's quite an accurate analysis as always 💯
Aynı anda post atmışız 😀
https://twitter.com/idiosyncratic1_/status/1415061086081064966
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Agreed with you, which i beleived that cryptocurrencies will be next to back on in other to be survive. Also to generally accepted as a medium of exchange world wild
Great analysis from you
Thank you dear :)
Almost welcome boss mate!
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