The economic crisis was inevitable, how is that possible?

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The economic crisis, which began in March 2020, had been expected for several months before that. It was inevitable because what was happening at that time in the world always ends in crisis. Let’s take a look at why this economic crisis was inevitable and expected by many.

Why it matters

During 2020, some countries lost around 5% of GDP, some more, some less, depending on the country’s development. The only exception was China, which grew in 2020. But the truth is that the pandemic has shown us how fragile our financial system is and that little is enough to spread the economic crisis. Another problem was unpreparedness at all levels. These two problems then hit hard.

What you can hear

Through the pandemic, we brought you information on how central banks print money to mitigate the effects of a pandemic. The system is already in a great debt, and these incentives will only deepen the debt. This trend continues still even now. After the crisis, there will be another problem with returning to normal and it is more than likely that even greater debts will arise.

What it could mean

We should not forget Okun’s famous law, which was proposed in 1962 by economist Arthur Okun. This law emphasizes the fact that no evolution can continue indefinitely. World debt at the end of 2020 was US$277t, and this state cannot last forever. So the question is, what happens next? How will states respond and address this issue?

What you can do

The economic crisis we are currently in was inevitable. Another truth is that you should be prepared and be aware of the need to protect your property and money. If you would like to learn more about economics and the financial system, you can follow our articles and read more about what to expect and what to do about it.

Source: medium.com

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