Economic crisis and depression must be an inevitable stage in human economic activities, but it will eventually pass. For a rich country, a crisis and depression will make the country stronger in the future, because from the crisis and depression Those in power will learn many lessons, and poor countries are inherently poor, and the economic crisis and depression will only exacerbate their poverty and pain. This is similar to the gap between the rich and the poor. More will only prompt him to better manage his wealth next time, and the life of the poor is already very difficult, and the crisis will make life even more difficult, and even many people cannot survive. Today I will briefly talk about this issue with you, and I will elaborate on each reason in the following chapters.
Point 1: Public Consensus on the Causes of the Crisis
1. Loss of confidence in future economic and expected income deterioration. As ordinary people, most citizens can enjoy the benefits brought by rapid economic development during the period of economic rise and outbreak. People are more willing to consume and upgrade consumption, so this will increase the vitality of the overall economy, and enterprises will thus obtain sufficient cash flow. , will develop faster and better. And when the economy is in a period of slow growth or stagnation, the circulation of the entire economy is very slow, so companies have to reduce wages or lay off employees. Unnecessary expenses are mainly to meet their own basic needs, so the purchasing power of the public declines, and even a cliff-like decline occurs. At this time, because companies lack sufficient cash flow for a long time, many companies will go bankrupt, and a series of problems will inevitably be involved next. Problems, such as unsettled loans from banks, unsettled payments from suppliers, etc., so the final result is systemic risk.
2. Excessive expansion of credit, excessive lending, excessive currency issuance, and excessive leverage may cause the economic and financial system to become fragile
Now in any country, credit is over-expanded, and there are more and more currencies. However, due to the different national conditions and the wisdom of the government in dealing with things, the crisis risks are different. In other words, some risks are obvious, and some risks are small. , and some risks are highly concealed. Nowadays, there are a wide variety of credit products, from traditional bank credit cards, to the so-called Internet micro-loans that have been suppressed in 2019, to the familiar Huabei, Jiebei and mortgage products. If the economic crisis presents a longer cycle, it is undeniable that it will inevitably lead to systemic financial risks. In addition, highly leveraged credit products will undoubtedly aggravate the arrival of the financial crisis, such as black-hearted Internet small loans, and the recent fiery Ant incident. In the end, although the huge amount of money put into the market has stimulated the vitality of the market, the resulting inflation has raised prices, but the increase in wages of the public has obviously lagged behind the speed of currency inflation. There will inevitably be a lot of unsalable goods, coupled with many other intricate factors, will lead to a large number of enterprises going bankrupt due to insufficient liquidity.
3. Asset revaluation
In the business world, many companies are overvalued by investment institutions. Whether we are really overvalued or want to harvest leeks. The bubbles we often hear include the Internet bubble and the real estate bubble. I use them as the subject to explain my understanding of it: In fact, the Internet is a platform. The only difference from the traditional business model is that all the product information of the merchants is displayed on the Internet. If the Internet over-expands and monopolizes commercial sales channels, it means that the neck of the merchant's fate is stuck by Internet companies. When the profits of other physical businesses are greatly squeezed by Internet companies, it will make it difficult for a large number of small and medium-sized enterprises to make profits. Coupled with fierce competition, they will eventually go to the There is only one destination, and that is bankruptcy. If the backbone of the society falls, the harvest targets of Internet companies will decrease sharply, and Internet companies will also need to pay employees' wages and other miscellaneous expenses. How long can you last if you cannot make ends meet. When such a phenomenon occurs for a long period of time, whether as an investor will still overestimate the company, I think this is the same as when people look for a partner, they always feel that they are excellent, and they should find an even better partner. Big, always stick to your own ideas, and one day when you are old, you still don’t have a suitable partner. At this time, I think everyone will re-understand yourself and adjust the conditions of the partner.
4. Hyperdeflation
Although vicious deflation hardly exists in today's era, we still need to have a sense of crisis. When the economy is in a period of stagnation and the pressure of competition among enterprises is increasing, whether it is an investment bank or a large consortium, when there is a huge inverse ratio between the return expectation and the risk, they will choose to be wise and protect themselves. Investment, as well as a series of operations to maintain the development of its own company, such as a large number of divestment from the invested company, a large number of reduced shareholdings and cash out, wait for opportunities again. We all know that small and medium-sized enterprises are the main tone of society. Although they are not top-notch in the industry, they carry the important task of social development, especially employment. Their development needs money, but because of their small volume, high risk, and the economic downturn, who is willing to lend and invest. Without good financial support, enterprises cannot expand production and enhance competitiveness. In order to survive, they can only cut expenses. However, in the end, most small and medium-sized enterprises cannot withstand the ravages of the economic downturn and have to go bankrupt. This will inevitably cause a large number of people to lose their jobs. Many of these unemployed people may barely survive in their families, and they may be burdened with heavy pension tasks, high educational expenses, and various loans. Once there is a lack of sufficient funds to maintain the cost of living for a long time, many people will not be able to recover their bank loans in time, and an inevitable crisis will definitely occur next.
5. Major changes in the currency standard
As a means of circulation and payment, currency itself is a piece of paper and has no value. The value is given by the state, but no specific value is given to it, so it has different values at different times. When my parents were young, they could buy four or five meat buns for one yuan, but now I can only buy half of the meat buns sold on the roadside, and I can’t even buy steamed buns for one yuan in specialty stores. Why is this because there is a lot of money invested in the market now, and if there are too many things, they are worthless. Next, let’s go back to today’s topic. The above example is just a function of attracting ideas. Our Chinese companies do business with American companies, especially many small and medium-sized enterprises. They suffer from the exchange rate. For example, the contract you signed with the US company is worth 5 million U.S. dollars, except for the 1 million deposit, the rest of the payment will be paid within one month after all the goods are received. If the renminbi is on a downward trend at this time and the U.S. dollar keeps rising, you will pay more renminbi to the U.S. dollar, and you will lose virtually more profit. Although large companies lose more, they have other channels to reduce losses, such as currency hedging, futures hedging and other investment tools. Assuming that China is a small country that relies heavily on foreign trade, most companies will struggle to survive and many will go bankrupt. Even if the government increases its money supply, it will not have a strong effect. First, it is difficult to circulate a large amount of currency in small enterprises. Second, excess currency will inevitably depreciate the domestic currency. The last thing to mention is that any resource is inclined to the strong, and here it is a large enterprise or a leading enterprise. , as an individual you would prefer to be around rich people rather than poor people like you, right?
6. Overproduction or insufficient demand
Overproduction or insufficient demand is actually caused by the mismatch between business and market information. The market demand is insufficient, and the overproduction of goods by merchants will inevitably lead to the hoarding of a large number of goods. Once these goods cannot be sold for a long time, the company has insufficient cash flow and cannot finance. If there is no capital and no loan, the enterprise can only face bankruptcy. Especially in a country, when the vast majority of enterprises are blindly optimistic about the country's development prospects, blindly optimistic about the people's consumption demand, and misjudge the market, such an ending will definitely happen to it. For example, many people buy gold when the market is high and buy heavily, and then there is a cliff-like drop of more than 100 US dollars, which will bring you back to the leveling line in minutes. After that, it will be difficult for you to turn around.
7. Greed and depravity of human nature
People's desires are always infinite. When individuals are rich, most people always want to reap the benefits, such as buying some houses and renting shops. Enterprises always want to be a big monopoly and reap the benefits. For financial giants, it is even more vividly reflected, infinitely magnified leverage to lend money to others, if it continues to be barbaric without supervision, if one day the economy is in a downturn, a large number of people lose their jobs, or encounter major natural and health crises, absolutely Most of the money will not be recovered, which will inevitably lead to a large number of debt crises and the resulting contradictions, such as recovering the mortgaged house of the debtor, the house is the last hope of a person, and if the house is taken away at a low price in difficult times, anyone will go extreme.
8. Capital misallocation
I mentioned capital misallocation again above. Here we focus on explaining that it is the core root of all crises. From the perspective of a country, the misallocation of resources to inefficient companies will be a waste of resources. Originally excellent companies will not be supported, which will affect the development of the country. For an enterprise, pouring resources into inefficient departments will naturally affect the healthy development of the company. In addition, the mismatch will cause the cost to exceed the profit, and in the long run, the income will not make ends meet, which will inevitably lead to crisis and depression. A country that misallocates resources will inevitably lose its international competitiveness, a company that misallocates resources will inevitably lose its industry competitiveness, and people who misallocate their lives will inevitably suffer worse for ordinary people, and smart people will not be astigmatized.
Add
