India Might be the Next Target
A Speculation About the Evolution of the 2020’s Crisis
India Might be the Next Target
Although economic issues have always been a wonderful way to balance the interests of nations, in today’s globalization, our vision will become clearer only if we look at two different materials, economic and political. The “crisis hypothesis” mentioned by Naomi Klein in “Shockism” is an initiative to create serious crises to promote shock by Williamson, an economist known for developing strategies for the World Bank and the IMF. The idea of “treatment” reveals the truth behind the economic panic in many countries in the 1990s. In 2017, Naomi Klein’s video “Naomi Klein: How to Resist Trump’s Shock Doctrine” on YouTube also made people rethink the motivation and path.
As the epidemic spreads further on a global scale, the test of countries’ response strategies will become more subtle. According to what is currently known, the attack of the new crown virus is the ACE2 receptor of the cell. Its gene expression is higher in Asians, and Asians are more vulnerable and have higher mortality rates than whites and blacks.
According to some research reports, in people with underlying diseases, such as those with diabetes, hypertension, and smoking, the expression ratio of this gene is also higher than that of people of the same race who do not have these underlying diseases. In addition, new coronaviruses are extremely depleting medical resources. According to China’s experience, rescuing a critically ill patient, regardless of whether it is saved or not, costs at least 300,000 yuan. It takes about three weeks from admission to rescue or death. In countries such as Europe, the United States, and Japan, at least $ 300,000 may be required. For many aging countries, they will soon be depleted of resources.
In Italy, over 10,000+ cases were tested, 528 people were found infected and 14 died.
Only 1,000+ cases have been detected across the European Union outside Italy, and 101 people have been infected.
In South Korea, 45,000+ cases were tested, and 1766 people were found to have been infected and 13 died.
In Japan, 800+ cases were tested and 183 were found to be infected.
Economic Impact of the Outbreak
In order to control the epidemic, in addition to increasing medical investment, it is important to reduce cross-flow of personnel. This will inevitably cause chaos in global production and trade. Even the United States has experienced a medical shortage due to the temporary disruption of Chinese pharmaceutical raw material exports.
The interruption of cash flow in a large number of enterprises is an inevitable result. More than $10 trillion in public and private debt globally have matured this year. The financial crisis of 2008 has not actually been resolved, it is just a transfer of private sector debt to the government sector. Public debt in Europe, America, and Japan has doubled on average in the past 10 years, and there is no capacity to further expand debt to purchase toxic assets in the private sector. Therefore, a global debt crisis is inevitable.
Under the impact of the Federal Reserve’s massive quantitative easing in 2019, U.S., European and Japanese stocks are at historical highs. Especially for US stocks. American companies issued a large number of bonds to buy back stocks, and executives took the opportunity to cash out stock options at high levels. Most investors use high leverage to invest in stocks. Therefore, the early stage will be marked by deleveraging. The plunge of the past week is actually deleveraging. In the process, the short will continue to cash out a portion of the profit, so it will stop rising from time to time, and then use the profit to further increase the short chip. The fight between the long and short sides is to see who can get more money. This will increase the interest rate on the repo market. Rising interest rates in the repo market will lead to higher costs for companies that rely on the repo market for daily production and operation activities. At the same time, the shrinking or even interruption of cash flow makes corporate risks rise, and corporate debt defaults occur on a large scale, and financing costs will naturally increase.
Will the economic crisis really come? I am not sure, but it is very likely that the global economy will decline this year due to the epidemic. Looking back at why this year ’s gold has risen so much? Smart capitalists have already begun to deploy safe-haven assets. Really large funds will never exit from the highest point of the stock market, and the nightmare of global stock markets may have just begun.
India Could be the Next Target of Crisis
In the past few years, India ’s GDP has grown rapidly. There are many media, and every day it is said that India will become a world power and a world power, but the road needs to go all the way. India ’s economic structure itself is not reasonable. problem. If it is a big country, India can only be called a populous country now, with 1.3 billion people ranking second in the world, but India ’s per capita GDP is only 2015 US dollars, which is still far from Vietnam ’s 2563 US dollars. It is a little boastful to say that the economic powers are a bit exaggerated.
India has come very close to the United States in the past two years. Historically, India is a spokesperson for the third world. It looks good to everyone, but it looks bad to everyone. Especially in Asia, India is worried about China. Power will threaten India’s future long-term interests. On the other hand, it will always worry about the threat of the leading Pakistan.
This makes India want to get closer to the United States and get help from the United States. Just last year, China, Japan, South Korea, Australia and New Zealand and the ten ASEAN countries signed the forthcoming RCEP agreement. India suddenly announced its withdrawal. It is hard to say that there is no US shadow in it. Trump and Modi also have a good relationship. The two held hands during the meeting. Trump also said “maybe Modi is the father of India.” However, the current global economic growth is sluggish, and European and American countries still have the risk of economic recession. At this time, transferring risks to vulnerable countries is necessarily the first choice.
However, India’s economic structure is not stable, its external debt is too heavy, its external reserves are insufficient, and there is no complete industrial system to solve employment and other problems. This has made the United States pass on risks to India. Unconsciously, a series of actions by the Federal Reserve have made the US economy Risk is reduced, while India’s growth has fallen sharply.
In the course of India’s economic downturn, continued interest rate cuts have also led to capital flight, and may even cause rapid inflation. Under the situation of insufficient aggregate social demand, continuous and inexhaustible financing is likely to accumulate huge risks. Once detonated, it is very likely to occur. A new round of financial tsunami.
