I was reading an article that Germany is officially in a recession which is not unexpected as reports suggested that this would happen in 2024. Germany had a 60% chance according to these stats yet South Africa only a 45% chance yet we are unofficially in one and have been for some time. The South African economy has been on a downward slide prior to the lockdowns mainly due to lack of funds in the economy due to government officials moving their corrupt money outside the borders. The lockdowns just highlighted how dire the situation really was and now have set the economy back years.
The only question I have is how bad are things going to become as this German recession announcement is 6 months earlier than expected so things have deteriorated faster than first thought. The Germans were relying heavily on Russian energy supplies and why they were not so keen to shut the pipelines. On the other hand the UK is showing signs of growth and they were penciled in as a certainty with a 75% chance. The people around the world have been through the mixer over the last 3 years and this is not what we want to experience as this is a result of weak leadership and manipulation that has lead us to this point.
An economy that shrinks for 2 quarters in succession is deemed in a recession so Germany's economy has shrunk over the last 6 months and with inflation rampant that wont change any time soon either. The only positive note is that this is summer time so less energy is required for residential heating purposes.
My understanding of world economics was that if America sneezed the world would catch a cold and when the States goes into a proper recession everywhere will be rough as it will effect everyone no matter where you are.
The big question I am asking myself is how will crypto hold up as this will be a new scenario never experienced before. Everything up until now has been all about the crypto cycle and history repeating itself. This could be another opportunity of getting some Bitcoin really cheap, who knows. I don't think I will change my strategy as if the market goes down I will just carry on and keep building as this will just be another testing period. If you have chosen your investments wisely the projects will survive and come out the other side stronger.
The only positive is this is happening whilst we are having a Bear market so most of our portfolio is already down. Could we see another 40% or 50% down from here as that would kind of suck but there is very little we can do, but ride it out if that happens. Some suggest we may see the start of a bull cycle in June with Hong Kong and Malaysia opening up their crypto exchange so this is a hard one to call as who knows as we are travelling into the unknown here.
