Understanding The Financial Markets
What Happens When Emerging Market Economies Collapse…
The production output of emerging market economies feeds the voracious appetites of developed economies. But when things sour in the global market, EM economies become the victims of collateral damage. This was all too evident in the collapse of emerging market currencies. All the while, the British pound, the euro, the US dollar, the Japanese yen, the Swiss franc and the Canadian dollar remained relatively resilient. So now you can see that there was a growing divide between the performance of emerging market economies and the performance of developed economies. Why is this relevant? Because whenever there is inequality in the financial markets, there is an opportunity to profit from that inequality. Convention says that there is nothing to be gained from bear markets, but conventional thinking should be dismissed because there are ways and means of generating substantial profits even when markets are moving in a bearish direction. We have seen vast numbers of traders generating an untold fortune during the global economic crisis that began in 2008. In fact, an entirely new way of trading the financial markets was popularized, and it was known as binary options trading.
While you reading about experts discussing the details of the impact of the 2008 global financial crisis, you are probably wondering about the recent financial crisis in 2015/16. It is true, China which was once considered to be an economic powerhouse ran out of steam, and its economy contracted sharply. This was unheard of and unexpected. Most every market participant in Asia-Pacific and across the Atlantic never expected it to unfold the way it did. But the Chinese juggernaut was suddenly not growing at a rate of 7% GDP per annum, it had dropped to 6.9% for 2015. While the figure is still impressive, it was evidence that perhaps the wheels were starting to come off the Chinese economy.
