Wednesday, November 12, 2008

What is next after the crisis?

There is some forecasts by my chairman, that the current crisis not only gives the impact on the stock market, but it also creates long period of recession to most of the europe countries and america.

This cisis is different from Asia crisis on year 1998, as it started first in America and later on in Europe. The distrust of each bank has increased the libor or so called interbank interest rate. As of now, most of the government has tried to increase the money supply to reduce the interest rate and also try to calm the public down on the nervousity of current crisis.

What I can forsee is that the so called hot money would be again come out to seek the opportunity of investment especially most of the prices of the asset, such as commodities, securities, derivatives, has reached the historical low.

I do not know how long is the recession is, and I am not sure will it be a depression. But what my concern is with the greater money supply, it helps to create a sustainable inflation. With the inflation and growth of population and the demography changes, there would be certain industries benefit from the crisis.

What I believe is that, with the smartest and greedyness of the human natures, I can forsee more and more innovative products would be introduced to the public. In the end, who is always stay at it's circle of competency wins.

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