The Consumer Price Index (CPIS) has revealed that the inflation rates have kind of cooled down as they have dropped from 9.src% to 8.5%. However, even then, the broader picture states that currently, the inflation rate is high, resulting in decreased trust among market participants in the global economy.
Global economic growth continues to decline, posing a major threat to the crypto sector. If inflation is not controlled by this year’s end, we will likely witness a situation of havoc.
Debt Crisis In an interview with Kitco news, Michael Gayed, a portfolio manager at Toroso events, spoke about what could have increased the inflation rate and what else could go wrong if inflation is not brought under control. The expert then says that there could be a debt crisis with an increased treasury revenue because the other countries will not repay their loans.
This is because, as per Gayed, while the dollar increases the other currency values plunge and it turns out to be real funding pressure as they don’t have a reserve currency.
Next, the expert says that there is a lot of indifference in the economy while the US dollar rises. Explaining his point, he claims that the global economy might end up at a point where the leverage is very high and the capital gains shall see an end. When this happens, he says, all of us will have to wait for things to settle down on their own.
The portfolio manager further stated that there might be deflationary incidents if the market refuses to pay back its dollar-denominated debt. This will point toward a default crisis.
In a nutshell, the path that inflation will take is still uncertain; thus, traders and investors should be cautious about their next step.
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Qadir AK Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 20src0. He has also interviewed a few prominent experts within the cryptocurrency space.
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