Author: Li Yunfei|Source: Original
An old entrepreneurial driver who has been in the mall for a long time, pay attention to me, share a little wealth dry goods every day, and make your life less detours.
Due to the impact of the epidemic, the current economy of the United States is extremely unstable, inflation, rising prices, supply chain shortages, energy crisis, workers' strikes, coupled with the fact that some of the US government's debts are about to mature, if it cannot repay the debt on time, then the United States is about to face the risk of sovereign debt default. This is a serious problem. Of course, I believe that this is certainly not a problem that can be completely solved in a short period of time.
Now the global economy is centered on the US economy, if the United States once the financial crisis is bound to affect the global economic development. So, 2021 is unusual, and 2022 will be unusual.
Today we will talk about, if there is a financial crisis, do we ordinary people hold real estate or hold cash? Believe my opinion today will subvert your perception.
Based on past experience, the financial crisis is almost once every decade. The 2008 global financial crisis was also caused by the subprime mortgage crisis in the United States. At that time, a large number of mortgage lenders went bankrupt, investment funds were forced to close, and the stock market was violently shaken, which led to a global financial storm.
When the economic crisis came, a large amount of money flowed to safe-haven assets, which led to a shortage of liquidity in the market, and then caused a mass panic, which in turn created a vicious circle.
So for us ordinary people, what are safe-haven assets? House or cash?
Let's start with the house.
When the financial crisis comes, all kinds of assets will plummet, and the house will bear the brunt of it. Let's look at the financial crisis in the United States in 2008. Due to the shortage of liquidity in the market, people cannot afford to pay off mortgages, and then they begin to sell buildings, resulting in a sharp decline in house prices.
Japan also had a serious economic crisis 30 years ago, which led to a collapse in housing prices. At that time, people not only lost their money, but also owed debts that were difficult to pay off for a lifetime.
Therefore, if there is a serious financial crisis, the house is actually very unservicing. And not only will it not preserve its value, but it is also likely to shrink greatly, thus allowing itself to owe the next ass of debt.
Let's talk about cash.
When the financial crisis comes, all kinds of assets in the market will shrink sharply, and consumption will not be sluggish. In order to stimulate consumption to reverse the development of the economy, in most cases, society will introduce loose monetary policy to rescue the market. To put it bluntly, it is the currency that releases water.
Let's look at this time, in order to promote the economic development after the epidemic, the United States has released trillions of dollars of water. So much money floods the market, and the end result is often inflation, rising prices, and currency depreciation.
If we sell assets for a safe haven in exchange for a lot of cash when the financial crisis comes, we will also face the possibility of currency depreciation. In the end, the assets did not depreciate and the currency depreciated, but depreciated, which is not worth the loss?
So since neither the house nor cash is a safe-haven asset, what is a true safe-haven asset? I believe this is the topic of concern for ordinary people.
In response to this topic, I would like to say that, first, it is not that the house cannot be hedged, but it is very likely that the house you buy cannot avoid risk. What does that mean? If you look at it in the long run, because of scarcity, houses in the core areas of first-tier cities will always maintain their value. Even if the housing prices have shrunk sharply due to the financial crisis, they will rebound rapidly with the gradual recovery of the economy and the increase in market liquidity in the later period.
So, whether the house is a safe-haven asset, it mainly depends on what kind of house you buy? Moreover, if you just need housing, there is no such thing as asset hedging, because you can't sell a house with a big rise or a big fall.
Second, it is not that cash cannot be hedged, but it depends on what kind of cash you hold? Is there a lot of cash? Of course, cash is divided into liquid cash and illiquid cash.
For example, some precious metals such as gold and platinum hard currency, as well as demand deposits, stable wealth management products, etc. These are liquid assets, but also liquid cash. Because it can be monetized at any time, while avoiding a certain risk of currency depreciation. Because of its illiquidity, real cash naturally cannot generate any value, so it can only watch it depreciate.
Third, as we said above, when the financial crisis comes, many assets will plummet, including high-quality assets. Then at this time, the bottom of the high-quality asset, and then wait until the economic recovery, the asset will usher in a lot of appreciation space. This is not only hedging, but also creating greater value. Of course, this requires us to have a vision, otherwise risk aversion can only become a risk.
When the financial crisis came, these three assets were our real safe havens. Of course, all this is based on food security, otherwise it would be better to exchange gold for a full meal.
Author: Li Yunfei, founder of a well-known Internet company, CEO of a large food chain enterprise, engaged in the Internet and physical chain industry for 16 years, has been reported by Sohu.com, NetEase Finance, Tencent, Phoenix.com, Zhongxun.com, Baidu and other well-known media platforms, good at Internet marketing, chain enterprise management.