Preparing For The Next Decade
25/09/2011 00:40
Given the events shaping the world today, JN0-660I have come up with an analysis what will happen in the next decade. Not all might be true but nevertheless, it is always better to prepare yourself for the worst than the best. Let us now begin with the analysis of current events and investigate how they can affect the future.
Today, money printing has reached an all-time high and this does not spell good for the next decade as this event signals inflation. From 1913 to 2007, only US$825 billion was put to circulation. After 1971, money supply began increasing at an accelerating rate. After 2007, the Federal Reserve increased the total money in circulation to US$1,700 billion, nearly double of that from 1913 to 2007.
I believe this will lead to very drastic inflation or even hyperinflation because such a big increase in money supply will significantly increase the price of goods and services. In addition, to maintain or improve the price competitiveness of their exports against the US, other countries will be forced to print more money to devalue their currencies. This will lead to inflation worldwide and it is already happening today where Japan is devaluing the yen to fight the US dollar. All these will also lead to newer hardships by increasing the cost of living greatly.
Moreover, government spending worldwide has been increasing today, especially in developed nations like the US. This is due to the existence of socialist programs in these countries which gives people the entitlement mentality, expecting the government to take care of them. All these will eventually increase debt because many of these nations do not have the money to fund these programs. To support the interest payments to such debt, taxes will also have to rise, unleashing a new string of catastrophes in today's globalized world.
Also, there will be projected increases in number of mortgage resets to November 2011 and then a fall after that. A mortgage reset occurs when a mortgage is due and banker resets the interest rate to market rate, which usually is a rise. With each reset mostly increasing interest rates and given today's falling prices for housingJN0-643, people will have an increased propensity to default.
This will cause the banks to lose money and increased foreclosures would mean that banks have to fork out extra money to maintain these houses. All these will probably lead to more bailouts and increase more taxes.
As a side note, the worst is far from over because August 2007 only saw a US$20 billion per month mortgage reset. In November 2011, an expected US$40 billion per month mortgage reset is coming and with this, a crisis bigger than that today will descend upon us.
In overall, the 3 events mentioned above will bring about very disastrous outcomes when their effects are combined.
First, there will be inflation worldwide since many countries will be forced to increase their money supply. Second, there will be increased government controls and higher taxes to pay for more debt. Housing prices however will not rise as fast as debt or credit will be harder to obtain, especially after the recent crisis. The higher taxes will reduce business growth and lead to higher unemployment with lower job creation. Here, investing for capital gains is extremely hard because investors will rarely be able to spot a gem that can withstand damage from all these events. Lastly, mortgage resets will worsen the 2 scenarios mentioned above as there will be more bailouts. All these bring disaster to a whole new level never imagined.
In conclusion, having known what may happen next, I hope investors prepare themselves well to go through the tough times ahead. As Charles Dickens once said, it was the best of times and it was the worst of times. LE0-406To simplify, whether tomorrow's events would be best or worst for you will lie in your decision today!
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