Causes of downtown in the modern Economy

[Minajx]

Tighter monetary policy and rising interest rates will restrain domestic growth and reduce capital flows to emerging economies. The capital flows that were searching for yields in emerging economies when interest rates in high-income countries were close to zero will likely decline, moderating growth in countries with large external funding needs. In such an environment, a cyclical downturn is more likely than further acceleration or even stabilization of growth at current levels.
That slowdown may already be happening. The Purchasing Managers’ Index, which combines various indicators in the manufacturing sector (new orders, inventory levels, production, deliveries, employment), will fall in the region.

[Coyster]

Most countries and their economy are already in serious problems as a result of the covid-19 pandemic, thus it was always going to affect their monetary policies/interest rates, especially in the developing countries/developing economy's. Due to some of the policies taken to tackle the pandemic, quite a lot of countries are already on the brink of inflation, thus they have to be cautious with whatever monetary/interest rate policy they apply for them to reduce inflation in their country.

Having said that, it was always bound to affect the developing countries more, as most of them are accustomed to borrowing, but it is what it is, and the only way to rejuvenate an economy is by pumping money into it, but with rising interest rates, loans becomes difficult to take both for micro/macro economics.

That could prolly be why many institutional investors are all of a sudden interested in Bitcoin as it's somewhat an anti-inflationary currency, imo, inflation is inevitable for Fiat currencies looking at how things are panning out, thus corporations/companies are seeking a hedge in Bitcoin, and it makes sense.

[BIT-BENDER]

 Deference in government policy can throw economy into a plum, almost every new government that holds the reign of affairs tries to work according to the policy they think is right, this won't be a problem only if these policies are not adamantly implemented even if with it fails in economy and many more sectors, like @coyster I think the pandemic left many economy with a black eye, mostly private individuals who run their logistics personally and had to close down because of the pandemic.

I don't major in economy nor am I an economist, but I know policies built by government on a country has the highest amount of influence/restricting Factors on their economy, for instant countries like New Zealand that even in the pandemic has a strong policy to tackle it making them manage the country even in the pandemic.

[Gozie51]

The economies that rely on big or developed nations will keep being reliant on them. Througly helping smaller nations will help them grow faster but some third world countries who have detectors and tyrannies as heads of states have also shown that they can survive when relationship are severed with some developed countries. Before the death of Lybian detector (Muammar Gaddafi ), the Ugandan military detector Idi Amin and many more control their government without help from certain countries especially from Europe and America. So tighter policies
may only slow certain nations and make them find ties with others.

[Poker Player]

I am not personally worried about a dowturn in the economy.

The market recovered from the 2008 crisis in about 4 years, and in theory it was the second worst since the crash of '29. The coronavirus panic seems to have been a brief blip from which we are emerging.

If you are prepared for crises, you don't worry about them. If you have assets with no debt or little debt relative to your assets and also different sources of income, you shouldn't worry much.

Some say that because of the massive printing, the next crisis may be like the crash of '29 or worse, but that remains to be seen.Another thing is that if a strong crisis comes, many people who are not prepared will suffer, and that is the bad side of the story.

[ninkdwi]

So when the economic sector of each country is not in a stable condition, the respective governments of each country will carry out several evaluations. namely by creating business opportunities that are able to survive the hustle and bustle of the Covid 19 pandemic which is increasingly unclear in which direction this pandemic game ends.
I think the government doesn't pay attention to this sector, they just evaluate the decreasing income from various business elements and raise taxes based on the capitalization of the increasing price of goods.

[oHnK]

But currently developing countries like mine are not implementing monetary policy like you said.  There are even many relaxation monetary policies to increase market interest in the wheels of the economy.  The lowered loan interest rate and even the ease of borrowing at the bank have been regulated by the government.  Fiscal policies such as providing cash assistance to the public are propagated by many types of assistance.  Foreign investors also keep arriving to provide loans to my country so that it can resolve the bad economic conditions caused by the pandemic.

[Findingnemo]

Tighter monetary policy and rising interest rates will restrain domestic growth and reduce capital flows to emerging economies. The capital flows that were searching for yields in emerging economies when interest rates in high-income countries were close to zero will likely decline, moderating growth in countries with large external funding needs. In such an environment, a cyclical downturn is more likely than further acceleration or even stabilization of growth at current levels.
That slowdown may already be happening. The Purchasing Managers’ Index, which combines various indicators in the manufacturing sector (new orders, inventory levels, production, deliveries, employment), will fall in the region.

Globalization put some countries in the danger zone since countries with the money starts to steal the natural source of a poor country and importing the products to their country by this they are making money and also the country they invested also making some money but its not a complete revenue forever, it only feasible as long as the natural sources exists and the great example for this is African nations.

So any country can't stick to a particular policy, they just need to adopt the best for the people and not damaging the natural resources much.

[Dilerium90]

I think, that we have not yet seen a real crisis, which is about to begin. Now everything is very shaky and there is a premonition of the beginning of a long-term bearish trend on american stock exchange. This is exclusively my opinion that can be discussed.

[Gozie51]

I think, that we have not yet seen a real crisis, which is about to begin. Now everything is very shaky and there is a premonition of the beginning of a long-term bearish trend on american stock exchange. This is exclusively my opinion that can be discussed.

I don't expect any crisis and no crisis of war is near. We can only see the current economic challenges that most countries are battling with because of covid-19. Currently, India is having to struggle with high infection rate after celebration of their festival.

Most economies are severing from inflation and that is one of the many economic challenges at the moment.

[sheenshane]

Lowering the interest rates and loose monetary policy could either make or break the economy.  We should always consider that with the highest volume, decisions made could affect the result big time and these two for me aren’t the solution to grow an economy.

The best way to aid the economy is to establish the ecosystem first.  This would only happen once we have our leaders with the highest intelligence and masters their emotion, leadership, and analytical skills.

It’s just sad that it really is hard to tell what solutions must be there to grow an economy or at least recover.  But for now, what I can say is that the best way to keep the economy up is to help people recover first by aiding them with vaccines so they can begin again.

[bitgolden]

Tighter monetary policy and rising interest rates will restrain domestic growth and reduce capital flows to emerging economies. The capital flows that were searching for yields in emerging economies when interest rates in high-income countries were close to zero will likely decline, moderating growth in countries with large external funding needs. In such an environment, a cyclical downturn is more likely than further acceleration or even stabilization of growth at current levels.
That slowdown may already be happening. The Purchasing Managers’ Index, which combines various indicators in the manufacturing sector (new orders, inventory levels, production, deliveries, employment), will fall in the region.

Tighter policy will never "slow down" economy, it will only help as long as everyone abides the law. The reason for why it slows downs is the fact that capitalist bosses around the world would rather put the money in offshore accounts and hide the income by showing unreal costs for stuff that they did not pay that much, just so they can get away from paying taxes.

If you take a billion dollar revenue companies CEO and tell him there is a method that they can save 1 dollars on tax paying but it will mean they will have to fire someone, that CEO will ask "who" and not how. At the end of the day higher interest is bad that is true but a bad inflation is even worse so that is like putting out fire with fire and nobody wins but at least there is a logic behind it, but tighter policy is definitely something that should be forced in order to make CEO's cooperate.

[mediaBuzz]

Tighter monetary policy and rising interest rates will restrain domestic growth and reduce capital flows to emerging economies. The capital flows that were searching for yields in emerging economies when interest rates in high-income countries were close to zero will likely decline, moderating growth in countries with large external funding needs. In such an environment, a cyclical downturn is more likely than further acceleration or even stabilization of growth at current levels.
That slowdown may already be happening. The Purchasing Managers’ Index, which combines various indicators in the manufacturing sector (new orders, inventory levels, production, deliveries, employment), will fall in the region.

Good try. Stop farming accounts whoever is doing this.



You plagiarised from pdfs, ebooks, and now txt files. Poor try.

Source: here

[verita1]

Covid19 is the great trigger that exacerbated the economic crisis. But the world economy is following its course at a slow pace and limitations because the working mass has been reduced because strategies for 50% work were devised.
For example, tourism is one of the sectors most affected in this crisis of the pandemic, transport such as airlines, among others.
I think it will cost us to lift the economy, especially in countries where the virus has hit hard.

[Kong Hey Pakboy]

Covid19 is the great trigger that exacerbated the economic crisis. But the world economy is following its course at a slow pace and limitations because the working mass has been reduced because strategies for 50% work were devised.
For example, tourism is one of the sectors most affected in this crisis of the pandemic, transport such as airlines, among others.
I think it will cost us to lift the economy, especially in countries where the virus has hit hard.

Tourism economy wouldn't suffer that much and any business for that matter if these businesses didn't just splurged their profits in filling the pockets of the people and they put some sort of emergency money in the case like this one and since they didn't do it, now the people are burdened by these since it is our taxes that is used for business aides.

[Ucy]

I would invest heavily in local Productions, mainly with local currency. I think it's better to transparently and morally prints lots of fiat currency and use them to boast productivity in your local economy than printing for people who aren't solving important problems and adding good value to the economy. The goods and services from such investment could be exported or traded/exchanged for things that can't be made in the country.

Invest in talents. Develop them the right way... not necessarily through typical schooling system. Talents are everywhere. You would be shocked what they can create for your country.

[Obito]

I would say that the biggest cause for the downtrend of the economy is probably the pandemic. The pandemic single-handedly debilitated the work force of many countries which means that businesses can't do their usual ssince they have zero workforce which means there is no money circulating to stimulate the economy and with no money circulating, the economy suffers since the government can't get taxes and businesses don't have profits.

[so98nn]

The business sector is major contributor of yields when it comes to the loans, real estate purchases and project fundings. I mean even a small corporate funding could take up loan equal to 100 people and they are more likely to repay the debts, interests, principle amount on time as compared to the people. The connection with the modern economy lies in the continuous borrow, lending and repayments. If that gets disturbed then things could really go upside down.

This is what has happened with the current economic model due to the pandemic. We are struck by heavy burden of debts now. More money printing is causing the dollar value to drop and thus rest of the currencies getting denominated. So yeah, this change is worst.

[el kaka22]

Tourism economy wouldn't suffer that much and any business for that matter if these businesses didn't just splurged their profits in filling the pockets of the people and they put some sort of emergency money in the case like this one and since they didn't do it, now the people are burdened by these since it is our taxes that is used for business aides.

Well, we all know how companies will not do that at all. We are talking about the same corporations who put their headquarters in other nations to pay less tax then have audacity to ask for bail out from USA, there are so many cruise companies who put their headquarters in Bahamas or other places like that so they could pay less, and then they end up getting screwed during this pandemic period and they ask for bail out money from USA, how does that make sense? Just because they have american workers in it? I am sorry but pay your taxes first.

If these companies all paid the proper amount of taxes, THAT alone would be emergency funding, kind of like IMF but for companies, but they are trying to make every single cent and use every single loophole for it, and when they are in bad situation they get a bail out money and pay tens of millions of dollars to their CEO's with it, bunch of greedy idiots.

[Silberman]

Most countries and their economy are already in serious problems as a result of the covid-19 pandemic, thus it was always going to affect their monetary policies/interest rates, especially in the developing countries/developing economy's. Due to some of the policies taken to tackle the pandemic, quite a lot of countries are already on the brink of inflation, thus they have to be cautious with whatever monetary/interest rate policy they apply for them to reduce inflation in their country.

Having said that, it was always bound to affect the developing countries more, as most of them are accustomed to borrowing, but it is what it is, and the only way to rejuvenate an economy is by pumping money into it, but with rising interest rates, loans becomes difficult to take both for micro/macro economics.

That could prolly be why many institutional investors are all of a sudden interested in Bitcoin as it's somewhat an anti-inflationary currency, imo, inflation is inevitable for Fiat currencies looking at how things are panning out, thus corporations/companies are seeking a hedge in Bitcoin, and it makes sense.

Obviously countries that are still in the developing stages are going to suffer from the pandemic but it is not as if the countries that are developed like the US are doing that much better, many of those countries did not solved the problems that caused the previous economic crisis and they wanted to believe everything was right, the US literally stole the wealth of their citizens by printing 20% of all the dollars ever created in a single year which is why despite things basically being as close as they can be to normal the recovery is weak there.