Inflation is defined as the rise of a price level of a country’s economy over a defined period of time. As the market moves,the price of goods, stocks,currency and loan indexes ebb and flow to compensate for the differences. As the pandemic has come and staked it’s claim over the world, a new economy has taken shape. However, inflation which may seem good in some instances, should also be noted as a cautionary tale. At the moment, no company knows this better than China’s own real estate based company Evergrande.
Evergrande’s valuation is currently based on the well-being of the Chinese economy, which is one of the strongest in the world. The company, previously heavily backed by real estate assets, in correlation with world markets, is in the middle of a monetary crisis. As they have begun to miss scheduled payments to bondholders, the value of their indexed currency has shuddered. The Chinese Yuan, which used to be bonafide 4:1 per USD has fallen down the proverbial sinkhole as it’s presently valued at an unprecedented 8:1 ratio. With their market essentially in freefall, overhedged investors are clamoring to recoup their losses. Cryptocurrencies,stocks.bonds, and other monetary denominations have taken a beating and the worst may still be yet to come. As inflation rises and currencies continue to fall, it goes to show that a dollar is a dollar until it isn’t anymore.
