We are living in a very delicate time as the world, after the 2-year pandemic, is now struggling to be financially afloat. Borrowing money to re-start businesses has become more prohibitive due to the high-interest rates imposed by the banks. Inflation and high-interest rates are daunting tasks for businesses. Should it hold back and wait until things get economically better? Or should we take the risk?
Understanding inflation and high interest rates
Inflation is caused by low supply and increasing demand for goods. Over the past 2-years, this condition was amplified by the restrictions on supplies navigating the globe. Moreover, the Ukrainian-Russian war has pressured regional exports of essential goods (eg. oil, wheat) to the rest of the world. These mitigating conditions caused severe disruptions in the supply chains. Production literally came to a halt and has caused prices to rise significantly.
Interesting times yet ahead
I was asked for a few predictions about what to expect in the next few months and years. All I could say is that we need to exercise wisdom with ALL our spending. Whether it is a family or a business expense, it doesn’t hurt us to be extra cautious about entering into new debts. Your old debts, on the other hand, need to be monitored. Inflation and high-interest rates are metrics that will definitely affect you, more than you will expect.
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In this episode: Alex Cook, CEO of ChristianWealth.com joins Ask Alex with host Neil Johnson on Twenty20 Vision.
Episode 205 of the ChristianWealth Podcast.
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