World Economy towards Crisis

There are many reason so, we can say again financial crisis about to happen in world economy especially in China, Japan, Russia, America & some of European countries.

Reasons are

• Devaluation
• Negative Interest rate in Japan
• Slow down in China
• US Fed reserve hike interest rate
• Spoiled Capital
• Debt on US
• Unsustainable Borrowings
• Still, World Economy is not recovered from Financial crisis of 2007-08
• Casino Capitalism
• Uncontrolled Capital
• Inflation

Emerging markets as well as Industrial countries want -

• High Demand
• High Valued Exchange Rates
• Low Inflation
• Low Fiscal deficit
• High Export
• High GDP

So, every emerging markets and industrial countries pushing economy for growth after financial crisis 2007-08. They are using different kinds of tools. China devaluated Yuan. US fed reserve printing dollars to remove their debt and also hike interest rate. Japan declaring negative interest rate. Every country wants to create domestic demand.  Every emerging markets & industrial country are making selfish monetary policy and economic rule without care of others. They always forget that we are living in global village.  Football means spoiled capital moving in global village no body know where it will explode.

If any country has spoiled capital and it has to transfer to other country it will hamper both in terms of financial loss. Similarly if numbers of country have then we can imagine the situation. Need of hour is every country want to collaborate to other country in term of economic growth unless until remove spoiled capital from their economy. if we see to all this activity in global village we can see World economy towards crisis.

Another picture is that how to make extensive and inclusive monetary policy to attract investment with clean capital. So, Currency will be valued and how to increase reserves and surplus with calculation of exchange rate. Other challenge to increase demand. Still, Country must focus on domestic demand. This is hard challenge for Industrial countries because they already experimented and touched saturation point. So, they depend on other markets.

Conclusion is that world financial institutions like IMF, World Bank, should play crucial role to make inclusive growth and good control of capital in global village.

By Ajay Kumar