Insurance and inflation 2

 

 

Attempts to mitigate the effects of the cumulative recession...

Both Russia and Ukraine have been excluded from the global economic system due to the war between them, which is the war that has the greatest impact on the global economy. The Israeli war on Gaza has no economic impact, and the civil war in Sudan only affects Sudan's neighboring countries, as Sudan has stopped exporting its products to them. Moreover, sanctions on Russia by Europe and the United States have severely damaged the global economy. The destruction of wheat fields and oil refineries in Ukraine as a result of the same war has severely damaged the global economy, leading to a horrific rise in food prices, followed by a surge in inflation. American and European companies have also withdrawn from a market of 140 million people with high purchasing power, given that Russia exported 11 million barrels per day before the war. This has now dropped to 10.3 million barrels per day. This is in addition to Russian industries in various fields and vast agricultural lands that produce most of the country's agricultural crops. In addition, there are natural gas pipelines that were exported to Europe, especially Germany, before the war.

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...and companies such as Kentucky Fried Chicken, McDonald's, Visa, MasterCard, and other major companies. American and European companies lost at least 10 million consumers with high purchasing power and high spending due to the sanctions imposed on Russia over its war on Ukraine.

There are countries that have been harmed by Russian tourists' reluctance to travel to them due to Russians' fear of being treated badly as a result of the war. These countries receive millions of tourists from both Russia and Ukraine. As a result, the inflation rate has risen and the gap has become very large between the salary of any person in developing countries and covering his basic needs of food, drink and clothing only. This gap exists in Europe and America, but to a much lower rate than in developing countries. Many countries in the Middle East and East Asia depend on European and American tourists. Therefore, the decision of European and American tourists to travel to these countries is threatened due to the high level of inflation and citizens in America and Europe postponing their travel to spend their vacations. Or if he travels every year, his new resolution would be to travel every two years, for example. However, the percentage isn't large now and may be unnoticeable, but if inflation rates continue, the percentage of those who focus their spending on their basic needs will be large and significant. Human nature always resorts to securing their basic needs first, then seeking travel and other luxury items. They prefer to cover their basic needs of food, drink, and clothing. Hence, the idea of ​​using a portion of health insurance, social security, and pension funds for the 30- to 40-year-old age group came about, as I mentioned in the previous article.

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...and this idea is for developing countries. Europe and America have financial reserves that can be used in infrastructure projects that will generate more job opportunities until the war crisis ends. Although European and American financial support for Ukraine has affected these reserves, and the losses to the European and American economies as a result of the withdrawal of major American and European companies from the Russian market are somewhat large, these reserves exist and can be used. Some may wonder that European and American companies are the losers. How did the entire European and American economy lose the profits achieved by American and European companies in the Russian market? Taxes are collected from Europe and America by the parent company. For example, McDonald's restaurants, for example, its withdrawal from the Russian market reduced McDonald's taxes... which are a percentage of the profits achieved by the parent company to the American government after the cancellation of the contract with the Russian agent who uses the McDonald's name in Russia... and thus, the profits distributed to McDonald's shareholders decreased... and most of these shareholders spend them in other fields or facilities within the American market... and thus McDonald's shareholders buy clothes, for example, from the American company Nike, for example. The reduction in purchasing power resulting from reduced profits for shareholders affects Nike's sales by decreasing... Visa and MasterCard also lost a lot due to their withdrawal. They are the trademarked companies used by global banks to allow any cardholder with this trademark to withdraw from any ATM in the world using their credit card... from any ATM belonging to another bank and in a country other than the bank of the person's account or his country... and you pay a small percentage to Visa or MasterCard... as a result of the withdrawal or use of the machine... and it is deducted from the bank where you opened your account in your country... and thus their withdrawal from the Russian market greatly affected their profits...

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Spending from infrastructure reserves, health insurance funds, or pension funds... replenishes a portion of Nike's purchases, for example... as a result of the fact that infrastructure projects or new investments generally create new job opportunities. Any worker or employee with a monthly salary is a steady and new consumer for large companies. ... However, this will not replace the Russian market and the profits it generated, but it is an attempt to mitigate and reduce losses...

And Trump came and found all these losses in addition to the financial support from Biden to Ukraine.. to try hard to recover part of this money by approving the customs tariff.. and this approval will raise the goods in the American market, which will lead to an increase in inflation rates.. and China, the number one factory in the world, will reduce its production as a result of the shrinking demand for its products in the American market, which is 230 million consumers.... and thus the Chinese workforce will pay the price of reducing production to increase the unemployment rate in China.... and China will try to compensate for the American market by searching for other markets within this planet... but inflation rates have hit everyone dead.. and the customs tariff on Europe by America will have the same effects, and thus Europe is trying to reduce the tariff through negotiations.... and thus developing countries must move quickly to save important industries such as the tourism and aviation industries within them, whether by encouraging domestic tourism in installments from health insurance money, like the idea I discussed in the previous article, or by pushing for investments  New job opportunities will be created... because the continuation of the Russian-Ukrainian war will lead to higher inflation rates and a focus on basic commodities, which will be available but at very high prices... which will lead to stagnation and a decline in demand for goods and services... which will lead to losses for producers due to the financial inability to purchase goods and the decline in the value of the currency and its purchasing power...

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..and consequently, the exit of large companies from the market as a result of stagflation and the increase in commodity inventories within these companies... due to the low sales rate and demand for the goods produced by these companies... will lead to negative results for the global economy... and some of the most important sectors that will be affected are the tourism, aviation, and real estate sectors due to the rise in  The cost of its requirements and the low demand for housing units, resulting from the gap between a person's salary and their needs, will force the person to cover the cost from their savings, which they had planned to purchase, for example. Consequently, the purchase decision will be postponed, just like the decision to travel on vacation.

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