The systemically vulnerable and alarmingly threatening economy is on its last legs it seems! Across the world, be it governments, corporates, small businesses and individuals have loaded up on debt to run their countries, companies and lives.
Living a life like this is done on the assumption that there will always be an increasingly bigger source of income to service the payment on borrowed resources! This assumption has been rocked in the largest sense of the word with the year of lockdowns.
Central banks have done what they can to ease the distress by printing more money, buying up debt, proving additional liquidity and give markets a false sense of optimism.
Pillage and plunder
Even in these times where we cannot afford to make mistakes, human greed and ignorance allow some to continue to steal and line their own pockets under the guise of being too big to fail!
As the misallocation of resources is an all-time high, capital tends not to find it's away to productive use cases and due to this businesses are kept alive that should fail and businesses that should be alive or pushed into failure.
The insolvency avalanche
Each month that ticks by more people default on their credit cards, student loans, car loans and business loans. Each month that goes by businesses shut their doors, companies cut costs, jobs are shed, savings are depleted, and opportunities are lost.
Banks and governments will try to pick winners and keep zombie companies alive as it suits those closest to the money, not what suits the economy and the best way forward.
Insolvencies will have a knock-on effect on various distribution channels upstream and downstream. As we see businesses in all sectors close down as demand for goods and service shrink. The best talent, the assets of those businesses will all be consolidated in fireside sales for those who have the liquidity to do so and take advantage fo the current system.
The lack of cash flow
Having cash flow into your personal business account is an absolute blessing all things considered in 2020 and should not be taken for granted. You are already in an advantageous position, what you now need to do is look to put that capital to work, as we're not yet in the insolvency phase completely I would say it's time to put capital into inflation based assets.
I am doing this with Bitcoin and some precious metals; what I predict will happen once all this is said and done is that those with assets will be able to leverage it in the new economy.
I am hoping that BTC becomes a recognised asset class, I can then use the value of BTC to collateralise loans, and pick up distressed assets such as homes, businesses, and more. Use those assets to generate cash flow and repay the loan and take a health profit.
What I am saying is BTC could be a way to protect yourself from insolvency. If you rely on one source of income, you put yourself at risk, if you save in one method like fiat, you put yourself at risk.
No one is going to look after you or advise you, no ones going to rebalance your portfolio or take into consideration your situation, your country, your expertise and ability to earn.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
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