HOW THE ECONOMY AND MONEY WORKS IN 2021 (PART 2)
See part 1 to know more about the workings of the Economy and how it favors the rich in 2021.
THE PATTERN OF PERIODIC CRASHES
There is a pattern of market crashes that happens periodically every time when there is more supply in the market than demand. Smaller crashes happen all the time, but the big ones come every decade or so. The latest big crash came after the coronavirus pandemic, the last one before this came in the form of a housing market crash, and before that, it was the dot com bubble that burst.
DEEPER THAN DEPRESSION: THE 2009 COLLAPSE OF THE HOUSING MARKET
The economic crisis is a part of our economy that takes place due to certain conditions that are indeed created by us…
And the mother of all crashes comes once every quarter of a century that generally lasts half a decade and is often called depression and recession. One of the biggest markets crashes ever to have existed was the 1929 great depression which lasted for about a decade and saw a shift in the pattern of how money works. This mother of a crash is yet to come after the period of 1929, and no one knows when this crash will come and make a massive loss of things in general.
In all these recessions and crashes the overall positive returns is slightly greater than the overall negative return which gives us the growth in the market.
By predicting these patterns the traders are able to make a living out of the changing market. The changes in pattern happen literally every second consisting of buyers and sellers working together in harmony to create a rise and fall proposition. Many people have made trading their primary source of income but sadly they are very few in numbers.
WHAT SCHOOL NEVER TEACHES US?
Our schools are based on the teaching pattern of the industrial revolution which took place in the 1900s. In those days creativity didn’t matter that much, the thing which mattered was hard work and working under somebody, sounds familiar isn’t it?
Because they want to keep us poor and have a mentality of a financially illiterate person. School as an entity was built by powerful people in the early days of the Industrial Revolution to teach people to work in their factories. But sadly we are following the same thing and have not been able to change our curriculum since then.
But with every changing second creativity matters a lot in today’s world. Becoming more creative and becoming more consistent are the key aspects of becoming a game-changer in this world.
21st-century kids are taught by 20th-century adults using 19th-century curriculum.
If you look closely at the pattern of school systems you can clearly identify what they wanted to teach us, and they made sure that they don’t teach what the rich people know about money. Have you wondered why don’t have a subject about money in schools?. To answer these above questions people like Robert Kiyosaki and Ray Dalio have tried to teach financial literacy to the world through their books and other works.
This is one of the primary reasons why failing students make big in life and students who are good in studies end up broke.
Investment banks are another entity of a thing that acts as a bank to large Corporations and small banks. Banks like JP Morgan Chase, Goldman Sachs, and many others are prime examples of these investment banks. They know only one thing which is to make money and as a matter of fact, they are very good at it, history has taught us that they can even find a way to make money in a recession or in a depleting market. Take Goldman Sacks for example they made billions in the housing market crash.
5 Biggest firms in accordance to AUM (Assets Under Management)
1. BlackRock: $7.3 trillion
2. Vanguard group: $6.1 trillion
3. UBS group: $3.5 trillion
4. Fidelity Investments: $3.3 trillion
5. State Street global advisors: $3 trillion
In recent times the investment banks have been so influential that they have defined a country‘s economy in any sense. They only listen and served the rich and through their manipulation and influence trying to make rich people richer in the process. These banks function above the regular banks and generally have numerous assets in the multibillion-dollar range. these banks along with hedge funds are the primary financial entity that literally controls the economy.