As we observe the current economic state of the world, and particularly the European zone, we see a considerable amount of proof that the world is entering or in recession. And although there was talk of rising prices starting to calm down, a closer look reveals that according to the most recent surveys, inflation is showing no signs of slowing down.
In fact, it’s moving at a rapid rate not only in Europe but all over the world. More and more businesses are putting up banners that read things such as “total liquidation sale,” or “going out of business.” Businesses crumbling is just one of the indications of a strong chance of recession.
Dollar Is Growing
One of the biggest factors that economists look at when measuring financial trends is the power of the dollar. The dollar has always played a significant role in the world economy, and it is currently higher than it has been in over 20 years. The reason for this it’s because of rising interest rates within the Federal Reserve. When these rates go up, global investors turn their heads and start to take interest in the changing dollar since investing your money into American dollars is seen as one of the smartest places to go in tough financial times.
As the world begins to suspect we’re headed to a recession, more and more investors are putting the money into dollars as a safe place.
As we watch more and more dollars being invested and the strength of the dollar fatten up, it may indeed be a sign that we are headed somewhere we may not want to admit. Although the increase of the value of the dollar may be beneficial for Americans, it certainly doesn’t benefit the rest of the world in a general sense.
Decrease in Online Shopping
Since the Coronavirus, online shopping was at an all time high. Experts projected that online shopping rates would only grow and grow as the years go by. However, consumers are starting to slow down on their online shopping, as many as 5% of consumers say they’ve had to dip into their personal savings recently.
Since inflation is increasing the cost of living, people are more hesitant to “add to cart.” People are prioritizing rent, food, and basic needs rather than frivolous online spending.
High Energy Prices
Europe is seeing energy prices skyrocket this year as a significant amount of their nuclear power plants shut down. As such, heating houses will become a challenge this winter, and we could see a struggle for people being able to pay their bills.
Despite efforts from European political leaders to find solutions, the truth is that many Europeans will go into debt trying to pay for their expenses.
The overall consensus is that the world is almost certainly headed for a recession, the question is how long will it last?
