At present, the overall global economic growth rate is slowing down, the international situation is complicated, and the trade environment is deteriorating. China, as the world's second largest economy, is of course no exception.
In recent years, domestic economic development has not been very prosperous, and international trade has been maliciously suppressed by the United States, which has had a direct impact on the development of our country. If this situation continues, our economy will face huge challenges in the future.
This forces us to think about the following question: if our country's economy falls into an internal cycle in the future, is there anything whose price will not be affected by the external environment?
It may even rise instead of fall and still be very valuable. What business opportunities can we ordinary people see from it?
Experts believe that when my country's economy is trapped in an internal cycle, there are two things that are most valuable. What are these two things? Why is this so? Is there any scientific basis for this?
1. What causes the internal circulation?
The general meaning of the internal economic cycle is that all the processes from the production of a country's products to their final delivery to the hands of consumers are completed domestically.
In short, our products have not been exported and circulated in the international market, which is what we often call self-sufficiency.
So how is this internal economic cycle formed? The reason for the internal economic cycle is that, on the one hand, the global economy is currently in recession, and the cost of international trade consumes more manpower and financial resources than self-production and self-sales. In addition, the interference of the United States and other countries in our country's trade market makes our trade environment not very clear.
On the other hand, as our country becomes increasingly stronger and the market size becomes larger and larger, it is capable of supporting the development of our country's domestic circulation economy.
2. In the case of internal economic circulation, these two things are "hard currency"
It has been verified by history that when the economic situation is bad and the economy falls into an internal cycle, the prices of these two things remain stable, or even rise instead of falling. They will always be "hard currencies."
Insiders know that these two things are gold and grain. Next, let’s analyze these two physical assets with strong value preservation capabilities one by one.
1. Gold, the eternal safe-haven asset
I believe that everyone knows more or less that gold is a good way to maintain its value. As a very scarce resource, gold's ability to maintain its value has been recognized throughout history. It has also played a very important role in turning the tide during economic crises many times.
For example, when the global economy was in the midst of a financial crisis in 2008, the purchasing power of currency dropped significantly, and most things became worthless. However, the price of gold not only did not drop, but instead rose significantly.
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It helped many investors survive this financial crisis and allowed everyone to truly see the gold’s ability to preserve value and investment value.
So why does gold have such a stable ability to preserve value and become a "hard currency"? Let's take a look.
The reason why gold has become a "hard currency" is mainly based on its following characteristics.
Because of the scarcity of gold, as the saying goes, "scarcity makes things valuable", and it is well known that gold is a very rare metal. Precisely because of the scarcity of gold, gold has always been very precious and expensive both in the domestic and international markets.
This means that the price of gold is less affected by the external environment and is relatively stable, which is also one of the important factors that enable gold to maintain its value stably.
Because of the global liquidity of gold, unlike currency, gold is not affected and restricted by various uncertain factors in international circulation. Gold can be freely circulated and traded in the international market.
Moreover, the price is more stable than currency and will not be affected by exchange rates. This makes the risk of gold investment much smaller than other products, making it more popular among investors.
In addition to the two points mentioned above, there is another important reason why gold can become "hard currency", that is, gold has policy support.
Our country's policies strongly support the development of the gold industry and have certain policy supports, such as encouraging innovation in the gold industry and providing certain tax incentives, all of which are conducive to the vigorous development of the gold industry.
It is based on the above three characteristics and functions that the ability of gold to maintain its value has been proven, allowing everyone to see the hope of investment, especially in bad economic times. For example, the ability of gold to maintain its value is particularly important during periods of inflation and economic downturn.
During inflation, the purchasing power of currency drops significantly, while the price of gold will remain stable or even rise slightly, allowing gold holders to maintain the appreciation of their wealth.
Because many knowledgeable people will choose to buy some gold as an investment when they have spare funds.
When the economic situation is bad and the market fluctuates greatly, gold is regarded by many investors as a reliable investment product due to its scarcity and price stability, making it the most valuable and safest product.
In short, as a "hard currency", gold is more stable than currency and other physical objects due to its scarcity and has a stronger ability to resist risks. You can consider choosing gold as an investment when the economic situation is not good.
But the editor needs to remind everyone that the price of gold will change at any time and it is not static. You can do more comparisons and thinking when choosing, and be rational in viewing and purchasing.
2. Food: the basic need for life
Whether in times of war or peace, in times of economic growth or economic downturn, no matter when and where, no matter how the external environment changes, food is a necessity for human survival. It is the most basic material guarantee for our survival. Without food, everything is empty talk.
Regardless of whether the economy is good or bad, everyone needs to have enough food to eat, and the demand for food will not fluctuate too much. Even when the economic situation is bad, everyone's sense of security will be reduced, and they will be afraid of starving. The demand for food will further increase, and many people will have the habit of hoarding food.
It is precisely because of people's rigid demand for food that the price of food is relatively stable and will not change much with changes in the external market environment. On the contrary, when the economy is bad or falls into an internal economic cycle, prices will rise and have a strong ability to maintain value.
Next, let’s discuss why grain has such a strong ability to maintain its value in our country.
The reason why food has such value-preserving ability is mainly reflected in its rigid demand and ability to resist inflation.
As a necessity of life, food has a stable demand and is relatively resistant to inflation. The following is a detailed analysis of the value preservation ability of food:
The rigid demand for food. Food is different from other things. As a necessity in our daily life, each of us needs it for three meals a day. Therefore, its consumption is a rigid demand and will not change significantly due to identity, economy, market and other factors.
Food can fight inflation. As we all know, during inflation, currency will depreciate severely and purchasing power will drop seriously.
However, due to the rigid demand for food and the fact that annual food production is relatively fixed, and China being a country with a large population, has a very large demand for food, it is basically impossible for food prices to drop during periods of inflation. Instead, prices are very likely to rise.
Because the food issue is directly related to the livelihoods of China's more than one billion people, our country attaches great importance to agriculture. Every year we provide various policy supports, such as subsidies for farmers.
To sum up, the value preservation ability of grain is more stable than other products and is less easily affected by the external environment.
If my country's economy falls into an internal cycle, food may be a good investment project. Friends who are interested in agriculture can give it a try. However, the editor still says that there are risks in any industry, and everyone needs to think calmly before making an investment.
in conclusion
In short, gold and grain are less likely to be affected by market changes due to their scarcity and rigid demand. They can play a very important role when the economic situation is uncertain. They are also two products that ruthless investors value very much.
If our country's economy really falls into an internal cycle in the future, then gold and food will inevitably become one of the "most valuable" assets, and will most likely be the choice of many investors.
As a scarce asset and a tool for preserving value, gold will play an important role in periods of economic instability; and food is an essential food for sustaining life. They can also promote each other in the domestic circulation economy and ensure the relative stability of our country's economy and society.
New agriculture and gold may have better opportunities in the future, but at the same time, we must also be clear that if we really fall into an internal economic cycle, it will be a great challenge to the development of our country.
But we must also firmly believe that as the world's second largest economy, our country's economy will surely be able to radiate more vigor and vitality and make greater contributions to the development of the world economy.
