The freedom of the market against the market

13 Sep

One of the main drivers of the current crisis whose war is a consequence rather than a cause is the so-called market crisis, several products face barriers of price control attempts against the high demand of commodities: gas, oil, iron and even silicon ( not the sand of course, but the manufactured producers).

So while the European Union discusses controlling the price of gas, it tries to increase the stock due to the war in Ukraine, since Russia is the main supplier, which is contradictory because more is bought to keep the stock with the winter in sight. (November), the cost must increase and so it is not possible to control prices.

Also the total shutdown of the largest nuclear plant in Europe, the Zaporizhzhia, which is being shut down, could further exacerbate the energy crisis, Russia continues to point out the dangers of weapons and bombings from Kiev to the region, which could lead to catastrophic consequences,

China’s crisis with Taiwan also hides a market crisis, on the one hand the power of the rebel island in the production of silicon chips, and on the other an internal crisis aggravated by the bankruptcy of Evergrande, the country’s largest construction company, which was private and now it will be nationalized in an attempt to contain the crisis.

Thus communist China also knows the perverse effect of the market.

The Chinese real estate giant failed to deliver the debt restructuring plan as promised until July 31 and since then the Chinese government, in addition to discovering the evils of capitalism, also resorts to nationalization to avoid a more serious failure, those of the banks that financed the default.

The company stopped paying the bonds in dollars in December last year, according to estimates released by CNN, the amounts will reach 300 billion dollars in liabilities, which generates a wave of lack of credit in companies that operate in the Chinese real estate market.

The sector is responsible for almost ¼ of the Chinese GDP, and the activity that most contributed to the recent growth of the economy there, is now facing a strong slowdown that also worries the western market, which has made many new investments in this market.

Dependence on Russian gas (graphic) can seriously affect the world economy, for example, even the UK being independent is already affected.



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