The world economy is staring at economic hardships and high inflation could be one of the main reasons for imminent economic slowdown in the upcoming quarters. The US Federal Reserve has raised interest rates multiple times during the last few monetary policy meetings. Central banks across the world have been trying to tame inflation and raising interest rates is a vital tool for them to tighten money supply.
After COVID-19 pandemic, governments across the world have undertaken major steps to keep the economy strong. However, low interest rates for a really long time have led to easy access to money. This has inflated the prices of various assets including real estate, commodities, energy and precious metals. The United States is technically facing recession as the GDP has declined for two consecutive quarters.
Higher Energy Costs
As Russia started military action in Ukraine, the European nations had no choice but to impose economic sanctions on Russia. The desired impact of these economic sanctions on Russia has not been achieved so far. On the contrary, European countries are facing high energy costs. Business owners had no choice but the raise the prices of products as electricity and transport costs went higher. Transport costs alone can impact the end user prices of majority of products and services.
Recession would Impact Investment
Whenever business owners feel pressure on their balance sheet, they usually put investment plans on hold. This impacts many associated industries as construction, new equipment purchases and expansion plans come to a halt. Government will need to help businesses raise their demand in order to deal with an imminent recession. During the 2008 recession, the US and European governments announced major stimulus packages to boost investments. However, economic experts believe that this time is quite different. We might be facing a recession this time due to high prices, high demand and inflation. And, central banks are trying to keep inflation under control.
Recession-proof Investment Options
Real estate sector has witnessed strong demand after COVID-19. The asset prices went higher as new construction activity declined. While real estate prices can see a decline in the upcoming quarters, in the long term, real estate could offer better returns and less volatility compared to other asset classes like stocks.
In year 2022, Nasdaq Composite and Dow Jones have declined massively during the first six months. This decline has been one of the steepest in the recent years. Market experts believe that stocks could see further pressure in the coming months.
COVID-19 pandemic has led to a major change in attitude of people towards spending, life and work. Many people already enjoy working from home and dont plan to return back to normal office job.
During COVID-19, online gaming and sports-betting has witnessed a strong demand. People enjoy sports events and placing bets on chances of winning of their favorite teams can be highly rewarding. Online casino games are also witnessing high demand from bettors. Live online casino is another segment that has become favorite of newbie and experienced bettors. Bettors can find interesting casino games and sports betting options on online-kaszinó.com and choose their favorite platforms for placing bets.
Crypto-currencies and New Asset Classes
Crypto-currencies have been in focus during the last few years. While governments across the world wish to control them, supporters of crypto-currencies believe that any authority will find it extremely difficult to control these decentralized assets. China and India have warned people about investing in these assets due to high volatility and no government control. Indian government has proposed taxes on earnings on crypto-currencies in the latest budget.
Supporters of crypto-currencies consider them as a hedge against inflation and falling value of currencies. However, the massive volatility in these assets weaken the argument for them as a store of value. Bitcoin and Ethereum have faced a major loss in valuation during 2022 and have led to fall in other crypto-currencies as well.
We might be staring at recession but with correct policy, central banks across the world could avoid economic troubles. In inflation comes under control and energy prices reduce, we could see growth in the coming quarters.
Disclaimer:
- As per the Public Gambling Act of 1867, all Indian states, except Goa, Daman and Sikkim, prohibit gambling
- Land-based casinos are legalized, with certain guidelines, in Goa and Daman, as per the Goa, Daman and Diu Public Gambling Act 1976
- Land-based casinos, Online gambling and E-gaming (games of chance) are legalized in Sikkim under the Sikkim Online Gaming (Regulation) Rules 2009
- Only some Indian states have legalized online/regular lotteries as per and subject to the conditions laid down by state laws. Kindly refer to the same here
- Horse racing and betting on horse racing, including online betting, is permitted only in a licensed premise in select states. Kindly refer to the 1996 Judgement by the Supreme Court Of India here and for more information
- This article does not endorse or express the views of Qrius and/or any of its staff