We have talked a lot about China and how the economy is going to collapse. So much so that it feels like it's never going to happen as the country continues to do just about everything it can to right itself. This is mainly from zero covid policies and other policies including aggressive actions not only towards Taiwan but also towards India as China looks to expand its territory to start to gobble up resources it needs to continue to be a super power.

A Little History Lesson

China was a rather low class country for all of it's life. It wasn't until recently in the 1980's when China signed a trade partnership with the USA and the world that it allowed it to enter to global markets at scale.

From there the country blew up as companies went to it for cheap labor and massive resources. However the country started to let that go to its head and started to issue high fees on companies if thy did business dealings outside of China further pressuring companies to stay within China. It also ballooned it's real-estate sector which then it overly aggressively stopped people from investing in citing that "homes are to be lived in. Not a financial investment" but they recently did a 180 as their real-estate market came crashing down. This change allowed investors again to buy up other real estate but it feels like its too little too late and the country is now printing money like wild just to try and keep pace of their 5% GDP. They are legit throwing anything and everything at it right now and it's pretty wild.

The Current Numbers

China is currently dealing with a number of bad factors. A 18.8% youth unemployment rate and companies not really being able to fire people. Their system is pretty wild but it's also beneficial to the worker. For example if someone has worked at your business for 9+ years. The company is required to give them a 30+ notice that they are being fired plus 9 months of severance.

That sounds great right? At least for the worker it does. But what happened instead?

Companies stopped giving bonuses, the demoted people instead of firing them reducing their wages. So instead of getting rid of people they simply kept them working but working for much less which is actully in that companies interest compared to the massive amount of payout they would have to do in order to fire people.

This has caused a few things to happen with the overall population. Of the working class it's created a very toxic environment in which companies are paying less but keeping people on the payroll so when they do fire them their severance is MUCH lower or they flat out just keep them working at a much lower rate.

This then causes workers to hoard money, leave instead of being fired, and once again let me push the point of they aren't buying and instead saving as much as they can. The issue then comes as this continues on and the country prints more and more money for high inflation that means that money people are holding on to continues to loss more and more value.

It's Not Just China

While most of the target is on China at the moment you have to also understand that it's not just China. The rest of the worlds economies are also a mess. Just take a look at the USAs debt and how out of control that is at the moment. The UK and other European countries are the same way plus Japan. Not to mention to erupting wars as countries try to regain some sense of power right now.

There's a world wide power struggle happening right now and personally I believe hoarding up as much bitcoin and crypto as possible (mainly bitcoin though) is a solid play because it should hold value as a world wide asset as inflation rises the price of bitcoin should rise with it acting as a hedge against inflation, war etc.
*This is just my opinion and is not financial advice. Do your own research before investing and understand the risks.

What we are most likely going to be looking at world wide is kind of what we are seeing happen in China right now. That easily comes down to the only way for countries to get out of debt is to inflate their way out of that debt.

So say you owe 10 trillion dollars, that 10 trillion dollars sounds like a lot of money but throw in some high inflation and that 10 trillion starts to look easier and easier to pay off.

Just take a look at the last few years of things in the USA. In the 1990's just 30 years ago if you had a million dollars you where RICH! Like really rich and well off. Fast forward to today just 30 years later and if you don't have a million bucks for retirement oh boy you are going to seriously struggle! Inflation is that one thing people need to be very aware of because it will come fast and hard and if your money isn't in the right assets you'll end up losing out big time while those who do understand it will make off with more!

Posted Using InLeo Alpha