Fellow MMO-champs, this is a difficult thread, but it's something we have to talk about NOW, before IT happens LATER. I'm not an economist and I probably made some mistakes with my points, but the general gist of it is true. The facts of the matter are actually very simple but extremely serious, and should be taken into account when making financial decisions in the future:
1. The FED and ECB discovered that quantitative easing is the best way to solve monetary crises. They bailed out banks, institutions, hell, even entire countries by increasing money supply.
2. This increase in money supply is created out of thin air and should hold no value, but because it is used for various economic reasons, it holds value, even artificially. Those reasons include buying stocks, assets, bailouts, improving monetary policies, options, derivatives, gold reserves, oil reserves, other commodities, the list goes on. This is the beginning of a global zombie economy.
3. Normally the effect should have subsided after 2008-2012, but dropping the ball would signify a chain reaction of crises caused by a drain of liquidity.
4. Pumping money into the market wouldn't be a big issue as long as inflation is kept in check, but that is changing drastically due to the COVID crisis and the exponential increase in money supply in the last couple years, with no signs of stopping.
5. This so called inflation, even if it isn't technically inflation, causes the stock market to boom when unemployment is at all time high, house prices to go exponential due to demand, assets, cryptocurrencies and commodities are surging. Oil for example should be nowhere near the $50-$100 mark. We should be in a recession, but the stock market is at an all time high.
6. The real problems are slowly beginning to come to light. The gist of it is that wages across all sectors have been more or less unchanged, but the prices of everything valuable went up astronomically in the last years.
7. What does it mean? Hoarding fiat currency is going to be damaging, even in the short term. We are already seeing negative interest rates. I'm not a financial advisor nor is this advice, but diversifying by investing a part of your portfolio into anything tangible is a good idea right now, or at least should have been some years ago when prices seemed right.
8. The general consensus is that price speculation should be kept in check and not run amok as it does now, there is simply too much money flowing into the tech or financial sector simply based on speculation, and that should be backed by something tangible, ie. increasing wages. This is the effect of a zombie economy, which is basically backed by zombie money.
I'm not saying we are going the way of Weimar Republic in even the coming 10 years, but there is a definite cause for concern. The solutions are probably worse than the problem they are trying to solve. but that may change overnight.
I would really love to hear your thoughts on this.