May The Odds Of Default Never Be In Your Favour

in #economylast month

Hey Jessinsovency

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.

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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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i agree with you

Cheap money has turned the world on its head, those who understood it benefit, those who didn't pay those who benefit

Posted Using LeoFinance Beta

that's how the world works from times

I fully agree with the insolvency part but it's more complex than just Bitcoin - much more complex...

Well, shares and property bonds are prompt up by cash flow and debt and you can only really hold so much physical precious metals, and not all us can own a company that has cash flow. I hope there are more opportunities, we can't only rely on Bitcoin

Posted Using LeoFinance Beta

I'm actually surprised we haven't seen more of the economy implode from all of this.

Most gyms and restraunts won't survive this and people's personal finances have to be in extremely bad shape.

Not to mention all the lost revenue in areas that are travel destinations.

You and me both, I think we either underestimate how robust this economy is based on just the confidence levels of consumers and their belief in fiat to not give up and be so entrenched in it that it can continue on, as well as people becoming desensitized to the numbers, like a few years ago a billion was a big thing, now trillions are thrown around as normal, when will quintillions be spoken about? It's getting ridiculous.

I do think that all this does take a long time to play out, houses will take time to be repossessed and auctioned, they will try to save some through lower interest rates as in my country that still has basis points to cut, they can try to go negative.

I can see people are still not coming to terms with all of this, this is death by 1000 cuts, I am grateful each day it doesn't implode as it gives me one more day to prepare

What strikes me is the large amount of money that governments are using for all kinds of aid or credits for business owners or vulnerable people, obviously in the coming years our taxes will have to return this capital, poverty will undoubtedly appear very much , we must be methodical with our current capital.

100% tax is coming, it's the only way or hyperinflate all our money into confetti to pay it back to creditors who will have to enjoy having a huge pile of useless numbers lol. I think people are just so distanced from the reality and when we talk about billions and trillions people don't understand how insane amount of money or rather purchasing power that really is

Cash flow is good. Having multiple streams of income is trully ideal and necessary

Totally and people don't understand the concept of having small streams, they all want big paydays and don't see how small additions every day add up. I've been binge watching this show about debt lately lol, its horrible how people act when they asked to pay their debts, but I can't stop watching it makes me feel better about my life lol

Ah lol. I think that we can feel compassion for the people who made poor life choices, it could always have been us.

It depends, some cases, I do feel for them, others the people are just horrible and I don't feel bad for them at all, in fact I'm cheering the collectors on

Having just one source of income isn't a good option to make. There's need to diversify and BTC gives us a better alternative.

Posted Using LeoFinance Beta

absolutely, if you're not turning your time and effort into other forms of income or income protection you're only going to find yourself losing more of what you earn. It's really not about what you earn but about what you get to keep

Posted Using LeoFinance Beta

I love the last line. What you have saved is what matters most. One might have a million dollars but his debts could be above that amount.

Posted Using LeoFinance Beta

I’ve started to learn that this year and not to take so much of face value we don’t know what’s going on in other peoples homes and bank accounts

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