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just three days into the year imf's managing director crystalina georgiever drops the bombshell saying at least one third of the global economy could experience a Slowdown in 2023 the world economy is predicted to contract this year before picking up next year in a press conference held in Singapore the IMF stated that Global growth is anticipated to decelerate from 3.4 percent in 2022 to 2.9 in 2023.
it also predicted that the Slowdown will be more pronounced for advanced economies this definitely points to China the USA as of January 30th 2023 U.S inflation rate is at 6.41 compared to 6.45 in the previous month and 7.48 in the previous year this is higher than the long-term average of 3.28 as a result the FED approved an increase in the federal funds rates of 0.25 percentage points which was the smallest rise since March 2022 when the tightening cycle began with this change the FED funds rate reached the level of 4.5 to 4.75 percent Charlie Munger now known as associate of Warren Buffett and the vice chair of Berkshire Hathaway certainly didn't hold back his words on recession inflation in the U.S when he was invited as a guest onto CNBC late last year in 2022 talking about Japan USA Charlie Munger said we do know from what's happened in other nations that if you try and print too much money it eventually causes terrible trouble we're regarding inflation Kevin O'Leary said this in November of 2022 you printed seven trillion dollars in 30 months what did you think would happen why did the United States print more money the action of printing money was done in order to help the economy remain buoyant and it's known as quantitative easing QE was first introduced in March 2009 following the stock market crash of 2008.
whose responsibility is it the U.S federal reserve controls the money supply in the United States and while it doesn't actually print currency bills itself it does determine how many bills are printed by the treasury Department each year and Charlie Munger didn't really refrain from criticizing the US Federal Reserve and politicians however he did praise them when needed Charlie also explained that the politicians and the Federal Reserve saw money printing as the easiest solution to the debt problems of the average American he however added that that was not without this long-term dangers we know what happened in Germany when the Weimar Republic just kept printing money and the whole thing blew up and that was a contributor to the rights of Hitler so all this stuff is dangerous and serious the billionaire investor said he added that Hitler taken advantage of Germany was a combination of the Weimar inflation destroying the savings of the middle class and to Great Depression and we know what came after that Charlie also criticized the big players for thinking that they could keep printing money just because there was no immediate negative effect the last time they did it if more money is printed consumers are also able to demand more for goods but if firms still have the same quality of goods then they're responsible for putting up prices in a simplified model printing money will cause inflation he explained that trying to solve inflation by throwing money at the problem would have been the right thing to do if they didn't go too far with it they did overdo it though and it increased inflation and now the excess money printed is almost useless to reduce inflation the measure the Federal Reserve takes to increase interest rates increased interest rates would mean increased borrowing costs this would make people eventually spend less and Charlie is also as usual aiming at digging Bitcoin promoters as he's a known critic of the cryptocurrency world so Charlie does not see crypto investment as a way out of the economic bubble bad news for those who see kryptos a way out Charlie believes it's not really concrete and lives off of hype he also said that big players have also used the word blockchain a new technology to suck investors in he said that not every news thing is worth one's time and that a big crypto collapse would affect the economy in a bad way another take by Charlie is what Envy does to the average person the world is not driven by greed it's driven by Envy said Charlie Munger if you don't hear that often I can bet Charlie further explains that even though civilization came and Technology improved it only meant that some people had more and others wish they did he described the rich purchasing and expensive Rolex watch which they could get looked for as pretentious expenditure and how even the middle class want to copy that what this does is that it increases demand in a modern capitalist society and when production does not increase to match demand production companies will raise prices leading to inflation however this does Drive civilization and Innovation Charlie mentioned that he has seen Investments bring huge Roi but he does not see that happening in the future or the opportunity opening up for the college graduates to make advantage of it too it will be a long ride with incessant money printing increasing consumer demand which will eventually cause inflation also the Federal Reserve increasing interest rates to curb the inflation will likely cause more consumer demand to reduce this may be a never-ending cycle and you need to prepare for it
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