Financial theories of the world
1. When the price of gold goes up, the dollar tends to fall.
So the influx of capital into the United States is pouring in, and capital inflows to third-world countries that need dollars are boosting third-world economies. When the United States collapsed in 2008, the dollar depreciated, and so did the gold price. Third world economies rallied.
2. When gold falls and the dollar appreciates, people buy the US dollar because it refers to the growth of the US economy. When the US dollar appreciates, US stocks, which have to be bought in US dollars, go up. As a result, capital flows back to the United States and the outflow of capital from outside the United States creates chaos outside the US economy. Due to the influx of capital into the United States between 1986 and 2003, when the US economy was strong and the US dollar was strong, the US economy was rarely affected by problems such as the Asian financial crisis. Therefore, the appreciation of the US dollar is dangerous because it is an economic problem for third world countries.
3. If a war breaks out, the United States is between two oceans and is relatively safe. So if there is a war in Europe and Asia, the United States is relatively safe from war, and the United States has a good economy. Global investment is pouring into the United States, which feels very insecure, and capital is pouring into the United States. Then third world currencies tend to depreciate. Business can fail. In addition, when it comes to war, gold is more secure than the national currency, and more and more people are saving gold. In addition, the price of gold has risen as dollars can be used to buy weapons in addition to dollars.
Therefore, the Third World will suffer capital outflows. In the Third World export market, declining demand will lead to more economic problems.
This will hurt the economies of third world countries, especially those who import oil and rely on it to export to foreign markets.
The situation in Burma is that if oil prices rise, so will natural gas prices, which will increase incomes. As an agricultural country that can provide food for the war, there is an increase in income.
On the other hand, investments tend to flow out of you. In countries where you export goods, the war will cause economic problems and the demand of the people in those countries will fall, which will affect your export business.
Therefore, the problem of foreign income drought; Unemployment problems are more or less inevitable.It is also true that the lack of savings due to a sharp decline in bank trust has led to further appreciation of the Myanmar currency if such problems occur as the gold price strengthens.
Therefore, even if the economy takes a lot of precautionary measures, the kyat is more likely to depreciate due to rising oil prices. Bankruptcy can lead to a period of higher inflation at any time.