2022 just got even crazier (in the voice of the famous YouTuber and Tiktoker- Icycol) and crypto was part of the cause. After the FTX bankruptcy and Sam Bankman Fried gallivanting all over, was invited to speak at the NYT deadlock summit amid the crisis he left millions of users in pain of loss. One would think (once again) the Crypto bubble burst. But even the world is in a bigger mess looking at trade and economies.
The World Trade in Chaos
This year couldn't be more unbelievable as world economic records are shattered. Ugh… I mean negatively. Forecasts from the IMF reported that inflation in 2022 will reach 8.8% from 4.7% in 2021. This didn't happen in the heat of the pandemic (2.19% according to reports) or are we feeling an after-effect? It was reported that the Russia-Ukraine war is a big player in this.
EURUSD charts this year saw a breakdown below 1USD region to 0.98 which hasn't occurred since 2002 according to Tradingeconomics
Impact on World Trade
But what does this all mean for world trade and how does this impact an average human? Apart from the fact that those who are hit most are the direct residents of war/disaster-inflicted areas, there is a far-reaching ripple hitting us all. Surprisingly, reports from the World Economic Forum stated that world trade had been in recovery, especially after the COVID-19 pandemic and that the Russian war had little effect. Kate Whiting stated:
“Global trade in goods by volume has returned to growth amid continued disruption to supply chains caused by the pandemic and the war in Ukraine, and was 10% higher than pre-pandemic levels in May 2022."
We all know that the increase in goods volume means in demand and consequently an increase in production and production cost. An increase in production costs coupled with inflation as stated above means that businesses (especially those that require cross-border movements of raw materials) all over the globe must be struggling to keep cash flow throughout the production process. What is their go-to especially for large corps and SMEs? Trade Finance.
Trade Finance
So what is trade financing simply? It is all about investors (Banks majorly) coming to businesses to aid with cash flow when they supply goods to clients at a long distance. Sellers want payments for goods upfront so they can keep producing, and buyers want to keep
Posted from my blog with Exxp : https://cryptostocksreviews.org/blockchain-in-global-trade-finance-a-reality-or-just-another-hoax/news/