This article is based on the article No.184.
NO.184 The principle of the Great Depression in the era of very low interest rates. It will not always be a deflationary spiral.
This article is a postscript of the consideration that I have done in No.184.
World finance incorporates dynamism that distributes most of the wealth of the world economy to a small number of wealthy people. The world has shifted to ultra-low interest rates, and the amount of currency supplied to society on a global scale has increased dramatically. Most of the currency supplied to the society continues to be distributed to a few rich people by world finance.
The global ultra-low interest rate policy has widened the economic inequality on a global scale.
The world economy will enter the Great Depression.
Increasing interest rates reduces the amount of currency supplied to society. If the total amount of merchandise remains the same, but the amount of currency circulating in society decreases, deflationary pressures will arise. The scale of products sold by companies remains the same. Nevertheless, if forced to cut prices, companies cut labor costs.
If wages drop at the same rate as prices, there will be no problem.
However, the nominal wealth of wealthy people remains the same.
If the interest rate goes up, the yield of stock dividends may increase. High stock dividends to wealthy people will be a burden on companies.
If interest rates rise, investors will expand their investment in real estate. Investors procure investment funds from finance using assets of asset owners as collateral.
Real estate prices soar.
The rise in real estate prices is a burden on companies and individuals.
Rent prices will soar. Individuals reduce product purchases by the rise in rent prices.
For many companies, soaring real estate prices and chilling personal consumption are burdensome. Many companies' performance deteriorates. Many companies dismiss workers. Corporate bankruptcies will continue.
A large number of unemployed people appear. Unemployed people cannot consume because they cannot sell their income. Increasingly, the performance of many companies deteriorates.
The emergence of a large number of unemployed people and a vicious cycle of recession occur.
The world economy enters the Great Depression.
Currently, there are an increasing number of American middle class workers who have graduated from college and are becoming homeless without paying rent. They are employed by companies. But they can't pay rent with wages.
It seems that those people now support Democratic Socialists of America.
Due to the US ultra-low interest rate policy, the total amount of dollars circulating in American society has increased dramatically. Therefore, the annual salary of major leaguers would have soared.
If the US raises interest rates, the total amount of dollars circulating in society will shrink, so the major leaguer's salary should also go down.
Even if the US economy enters the Great Depression, contracts that have already been signed will bind the team. Each team will continue to bear the burden of the multi-year high annual salary concluded in the low interest rate era.
It may happen that multiple teams go bankrupt?
The same thing can happen outside the major leagues, right?
I want to share my awareness of the crisis, so I make this proposal.
Letter to White House at Google Blogger My Linkedin Hatena Blog Japanese Blog TOP 叙事詩(になればいいな) KeitaYamada’s diary English Blog TOP Odyssey(wow!) Blog of keitayamada This Google Blogger blog "Letter to White House "is writing Japanese articles with an effort to make it suitable for google translation. This makes it difficult to read Japanese sentences. This "Mail to White House" is translated by Google translate from "Letter to White House". So My English in "Mail to White House" may be unnatural. For that reason, I decided to write a Japanese article on the Hatena Blog that does not care about Google translation. I wrote an Japanese article on the Hatena Blog that summarizes more than 20 Google Blogger blog articles. And I made an English article same as Japanese article on the Hatena Blog. I link to Those English article at below. I'll link it. If it is easy to read, please read it. I hope that G
No.311 Gov bond with zero interest. Allow only central bank to buy. Gov execute new projects using this funds. This bond redeemed only when inflation rate exceeds upper limit. Solve problem. Please judge.
Expansion of industry and economy. State will execute projects that private industries do not. Economy expands by that size. Circulate currency to society according to the scale of economy. Inappropriate to use taxes for this national project. Private industry shrink as much scale as the project. With right funding, NASA projects, for example, will revolutionize everything in the world. Government envisions the project. Central bank will issue new currency to supply necessary amount to the project. Gov issues zero-interest gov bonds in the amount necessary for project, and let central bank buy them. Let me explain. Industrial production is value-added production. Value-added is creation of monetary value from zero. Currency must be provided to there. Purchasing decide value-added of product.So, Executing natinal project always produce value-added. If product is not used, it's consumption. Pyramid construction is huge consumption. Supported ancient Egyptian economy. Let'
No.308 Potential in India. ・・・“God prepared India for the crisis of the world.” Some Christians may think so.
India's potential・・・My guess, from speculation. Japanese people who visit India suffer a culture shock from the caste system. They choose to be Indian friends. Hindu laws govern everything. When the upper caste and the lower caste come into contact with each other, an undesired "Cause" is created in the upper caste. "Cause" causes "Result". "Result" is the result of the dynamism of reincarnation. At this time, an undesired cause is not born to the person in the lower caste. In Indian society, the upper caste does not touch, for example, tableware that the lower caste touches. This causes culture shock to visitors from Japan. I think it is inappropriate to describe it as discrimination. It is a requirement by Hindu law. The highest level of the caste system is Brahmin, and below the four-step caste, there is a caste that is an outcast such as Dalit. The people of Dalit are all free. All are permitted under Hindu laws. I think the Brahmin peo