Make sure to keep your chips at the critical moment.
2008 financial crisis, the whole world is afraid of whether there will
be another financial crisis similar to that of 2008. When the crisis
really comes, people are still unprepared and unable to deal with it.
What is the real danger？ The largest economy starts to divide due to
trading, the whole country was hit by COVID-19. An uncoordinated policy
response between countries will prolong economic weakness and trigger a
new round of currency war.To get more news about WikiFX, you can visit wikifx news official website.
Trade war, that means two or more countries have a conflict of trade
taxes with each other. Generally, a country implements trade war in
order to raise tariffs against other countries and expand its own
exports. If the countries involved refused to compromise, they will face
further increase of export tariffs.
Currency war means that
countries maximize their benefits through their own currencies, usually
by devaluing their currencies to stimulate exports and gain benefits
from the exchange rate. When countries begin to devalue their currencies
competitively, global currency wars and exchange rate wars will break
With the quantity of COVID-19 confirmed cases keep raising, the market investors have an unprecedented sense of urgency.
According to an analysis by MSIC, so far, global stock markets have
fallen nearly 20 percent as a result of the spread of the COVID-19
epidemic and the collapse in oil prices, and volatility is expected to
soar to more than 40 percent. It remains to be seen whether the crisis
will follow a pattern similar to that of the past.
Underthe epidemic, major central banks around the world have begun to act.
The Fed cut interest rates by 50 bp and 100bp in a row, lowered the
target range of the federal funds rate to 0- 0.25 percent, announced a
new round of quantitative easing (QE) of $700 billion and cut the
discount rate for emergency loans by 125bp. According to incomplete
statistics, in addition to the Federal Reserve, more than a dozen
central banks, including the Bank of Australia, the Bank of Canada and
the Bank of Korea, have also entered the ranks of interest rate cuts.
Although the European Central Bank and the Bank of Japan, which are
already in negative interest rates, did not cut interest rates further,
they both stepped up quantitative easing. The ECB added an additional
120 billion euros in asset purchases until the end of the year, while
the Bank of Japan announced an Y6,000bn increase of its annual ETF
purchase target to Y12 trillion and a raise of the Japanese real estate
investment trust (J-REITs) purchase target to Y180 billion.
It is worth noting that at present, a single monetary policy is no
longer enough to boost market confidence. At present, the Fed is only
one step away from negative interest rates, and there is a lot of
speculation that the Fed will join the camp of negative interest rates
in the future. However, whether negative interest rates can effectively
boost the economy is still controversial, and the policy has also been
criticized by many parties. The traditional monetary policy system,
represented by the Federal Reserve, has been in trouble. Although
extraordinary policy stimulus has become the norm, it cannot
fundamentally break the situation and will deepen rather than alleviate
the hidden risks.
Judging from the fiscal measures of major
economies, the US Congress has passed an $8.3 billion bill to deal with
the COVID-19 epidemic, and the Trump administration is planning to
launch a nearly $1,000bn economic stimulus policy. Canada has also
announced a new fiscal measure of C$1.1 billion. South Korea's
parliament approved a supplementary budget of 11.7 trillion won to deal
with the impact of the epidemic on the economy and support fragile
businesses and domestic consumption.