DEFLATION RISKS

in Tron Fan Club2 years ago

dollar-2714203__480.webp
source


In the next two to three years, there is a chance that we will experience both good and bad deflation. A cyclical deflation is currently underway, with commodity prices falling and even oil prices rising by up to 80%. Because both major China and Europe are experiencing economic downturns, this is the case. Deflation is imminent, and there has been a startlingly large increase in inventory. Nike recently stated that its inventory increased by 44% while sales increased by 3%.

They stated that their inventory was up by roughly 68% in North America and by 85% while it was in transit. Naturally, this will overwhelm the shop, and the only option to generate strong sales is to implement significant discounts. Innovation causes deflation over the long term, which is a healthy deflation. A decrease in anything will result in an increase in units. Deflation is pervasive if you look at other factors, and the FED is taking unemployment and CPI inflation into consideration.

In terms of employment, businesses found it so difficult to find workers during the epidemic that they decided to keep the workers. The FED will eventually change course because the interest rate hike has been consistent with the FED. Recently, we witnessed a liquidity crisis involving pension funds in the UK. Although it typically takes a very long time to build and mine, lithium is one of the world's most abundant minerals. Tesla, in my opinion, has sped up the lithium mining business and has taken a significant risk away from many commodity producers.

As you already know, the price of oil has increased, but producers have been able to overcome shortages by increasing production and altering chemical composition. For instance, lithium ion phosphate is replacing cobalt and nickel in Tesla's battery manufacture, which previously relied heavily on cobalt, which is mostly found in the Congo.

REFERENCE

Sort:  

Well written Keep it up

Coin Marketplace

STEEM 0.17
TRX 0.15
JST 0.028
BTC 62014.91
ETH 2410.27
USDT 1.00
SBD 2.50