Hello everyone, just saw the news of Sri Lanka, a brief chat
The so-called "national bankruptcy" was proposed by the International Monetary Fund (International Monetary Fund) in 2002, when a country's financial revenues are insufficient to pay the foreign exchange necessary for its imports, or its sovereign debt is greater than its GDP. The world's first country to go bankrupt was Iceland, which at the time had more than $130 billion in sovereign debt, but its annual GDP was just over $19 billion.
In fact, on July 6, the Sri Lankan prime minister said that the country was bankrupt, and on July 9, the Sri Lankan president and the prime minister both resigned and triggered the internal conflict.
Sri Lanka's national bankruptcy is only a pre-existing manifestation of the current state of the global economy, where the Russian-Ukrainian conflict continues unabated, leading to global food shortages and energy shortages; And the continued spread of the epidemic, which has led to the stagnation of global tourism, the impact on a country like Sri Lanka that is highly dependent on imports is disastrous.
In fact, not only Sri Lanka, but also countries around the world are under pressure, and perhaps only the United States will be better, because the us dollar is the world's currency and can be solved by raising interest rates. But some emerging countries are doubling the pressure. Since March this year, Egypt, Tunisia, Turkey, Lebanon, Peru, Colombia, Argentina, Ecuador, Uruguay, Belize, Grenada, El Salvador, Dominica and Costa Rica, Pakistan, Zimbabwe, Afghanistan, Laos, and Myanmar have faced many disadvantages such as currency collapse, prices, inflation, hunger, people buying gasoline, and a sharp decline in the number of middle classes.
From the last Fed interest rate hike, which shows the importance the United States attaches to high inflation, we can also see that from the beginning of the interest rate hike, commodity prices have fallen sharply, and crude oil has fallen from $123 to a low of $95 last week. At $95 is supported,
Let's take a look at The Chinese goods, the overall is a high, but recently fell from 229 to the current 195 position, the amplitude is also very large, but also supported around 190.
The videos I have posted in recent days have said that recently commodity prices are more embarrassing, one is that the high prices of bulk and the high inflation of the world make everyone (developed and underdeveloped countries) unbearable, so commodities are suppressed by monetary policies such as global interest rate hikes; Second, the global epidemic and the continuous stagnation of the Russian-Ukrainian conflict have made global transportation costs and production costs high, and capital has avoided risks and purchased a large number of commodity materials, making commodity prices now a dilemma!