Truth or Dare: Economic Challenges

The world as we know it is undergoing significant transformations.

  • 🤖 Artificial Intelligence is reshaping both business dynamics and our daily lives.
  • 🔗Similarly, Decentralized Finance (DEFI) is introducing radical shifts to our traditional economic models.
  • 🌍 As the axis of economic centrality evolves, it’s vital to remain updated and proactive.

Take a look at this Goldman Sachs’s projection for 2050, it offers some startling insights:

  • Asia is poised to take the reins, pushing G7 to make room for the emerging BRICS nations.
  • China is forecasted to eclipse the USA economically, with India positioning itself as the third-largest global economy (I have my reservations here, as the serious issue of population decline should somehow temper these projections).
  • India will become the third economic powerhouse

It’s noteworthy that many top tech CEOs already hail from India, reflecting this trajectory.

Given these tectonic shifts, let’s delve deeper into some critical indicators to better gauge our standing.

USA’s Pressing Concerns

The Federal Reserve (FED) finds itself in a bind, battling two primary challenges: curtailing inflation and ensuring employment.

One key metric reflecting the inflationary trend is the cost of electricity. This isn’t an arbitrary figure. Energy prices are pivotal, influencing a broad spectrum from industries to institutions and everyday consumers. Take a look at this graph:

Or if you prefer, at this one:

A prevalent narrative in Europe linked rising energy costs to Ukranian invasion and not the central bank’s inflationary criminal policies. However, what’s causing the uptick in the USA? Because of the war in Europe? has not a lot of sense… I don’t know Rick 😉

Adding to the economic quagmire, US oil reserves are witnessing historic lows.

It’s no surprise then that Russia seems quite content with OPEC’s recent decision to hike oil barrel prices. Yet, the real winner in this ongoing economic war between the USA and Russia isn’t all too clear.

Another alarming indicator is the soaring housing prices in the USA. With increasing interest rates, homeownership is becoming an elusive dream for many. Current trends suggest that an alarming 40% of incomes are dedicated to mortgage payments.

On the inflation front, the picture seems quite bleak.

Employment Challenges

The creation of new job positions has witnessed a drastic slump, reminiscent of previous major crises (e.g., the dot-com bubble, the 2008 financial meltdown, and the Covid-19 crisis of 2020).

If the trend of declining job openings persists, the near future may see a significant employment drop. This scenario poses a formidable dilemma for the FED:

  • Increase interest rates to curb inflation, potentially harming the economy, employment, and homeownership,
  • or decrease rates, temporarily easing the employment situation but aggravating inflation and accelerating the impending debt crisis.

Truth or Dare? You have to choose 😉

The pivotal question then becomes: how does one repay money that’s essentially conjured from thin air?

And meanwhile, Bitcoin continues its relentless journey towards its next halving.