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  • Category: Miscellaneous

    Three reasons why some sort of repeat of 2008 is a real possibility now

    The first reason why we may have a big global recession is the decline of China. It's purchasing and consuming power, one learns from various sources, is coming down. Japan is stagnating as the percentage of young people in that country is not considerable at all and old age pensions might become a big draw on its resources. And when the US dollar is strengthened, it's imports will become cheaper but exports of other countries might take a big hit.

    The second major reason is the stagnation in global markets. When the demand is down , people will not spend money but save it. The third main reason is the emergence of cheaper substitutes and the work from home culture, post Covid. Since people have shifted from the big metros and have started enjoying the benefits in smaller towns, these towns are now seeing a massive growth of new services. The old theatres are being renovated. Upper middle class restaurants where one spends upto Rs450 for a very decent dinner in a neat environment have opened up like never before. And for those who cannot afford the high cost, the low coat alternatives are simply multiplying day after day.

    So, since global capital will be somewhat scarce, we need in-house resources to expand. Since the size of the economy is so huge in India, the rural sector will play a big role in keeping the economy moving. That is, while people will spend less, spending will not drastically stop. Prices of even branded FMCG items cannot be increased rapidly. This will lead to the 25 percent extra culture to push sales.

    Let us wait and see when all these things happen.
  • #767507
    Global recession there are many reasons. The war between Ukraine and Russia is the biggest land way in Europe after 1945. The risk of nuclear escalation is also very high. This 2022 has seen the most far-reaching sanctions regime since the 1930s.
    Food and energy costs are the highest rates of inflation since the 1980s in many countries. Many companies are not recruiting and reducing their manpower requirements. That is why many employees are not going fast on their purchases and looking at the future with fear. Once the purchasing capacity comes down we will see a lot of change in the economic conditions of the countries.

    always confident

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