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The nature of the economy, rescuing some currents, is of an mathematical, logistical, but fundamentally sociological nature. The very definition of political science is that it is a social science.
In other words, understanding the cultural mechanisms of an economy must be part of the analysis, far beyond the mathematics involved.
The economic math is simple, like in any house:
1) receives for what it produces and spends for what it receives;
2) If you want something beyond what you receive in the month, ask for a loan, commit part of what you earn, pay with interest.
3) If you sell something, measure its value, whoever receives the goods pays.
4) Interest is an indicator of risk, the borrower's perception of the ability to pay on time.
5) If the bills are above what you receive, then either cut the bills until you reach the reasonable sustainability ceiling, or roll over the debts.
6) And abroad, if you sell more than you buy, it means that what is produced guarantees your accounts. If you buy more than you sell, it means that you have to improve your production methods so you don't have external dependencies.
These six conditions allow for the adoption of economic policies.
However, under these conditions there is a culture of spending, a culture of saving and the desire for things to happen.
A more sober and disciplined profile, he manages to keep, to grow slowly, but always.
A more average profile, balances savings with expenses, for average growth with a little more risk, but accepts those risks.
A bolder profile, throws itself into the risks. If the reads are correct, the bets grow in a short time with very big gains in that time.
But it all depends on the culture that involves discipline, knowledge, market strategy, risk taking and a dash of courage.
It depends, therefore, less on mathematics and more on the spirit of the one who undertakes!
In this way, when all this is contextualized in the countries, the ancestral culture, the way of seeing the world and how the people stand in favor of work and laws, allows things to happen or not.
In the case of China, 25 years of risks, heavy investments in infrastructure and technological education have transformed a technologically backward country, essentially agricultural and isolated from the world, into the second economy in the world.
This economy, today, interferes with almost everything on the globe due to the way it found itself as a power: basic industry!
China exports everything that can be prefabricated. In other words, most countries ship cheap, low value-added commodities and buy very authentic value-added manufacturing.
It thus caused a worldwide dependence on its products.
That way, when this economy slows down, let it be just 1 point, it wreaks havoc on fragile economies!
The global concern at the moment is the low internal liquidity of the Chinese economy.
Analysts, from the Chinese central bank, predict even more "dry" of liquidity.
Much of this is due to a stricter regulation increase.
They did not, apparently, foresee that the circulation of cryptocurrencies would impact so much on the Chinese domestic economy.
Cryptocurrencies have the ability to inject money into the local economy above six points. This means that simple citizens become part of the economy, injecting money obtained into the cryptosystem.
This money circulates, moves local commerce, maintains jobs, puts pressure on the production of simple products and lowers interest rates and capital-taking risks.
The ban on cryptocurrencies affected by 11% the circulation of currency and added values.
As a result, the risk of taking capital increased and the money available for loans became much more expensive. Translation: Gone!
The Chinese economy is highly indexed and government-centered.
Government decisions, in this type of economy, tend to impact the internal economy which, in this case of China, also impacts the entire world economy.
Cryptocurrencies, as a virtue, are immune from this type of problem, as they depend exclusively on investors to take risks.
The financial asset market, in general, has only this rule: how much risk you want to take will reward, fortuitously, those who know when to take a risk!
This is generally, therefore, own capital without depending on the banking financial system, with higher interest rates.
This is the discussion in the United States, with a detail: there Adam Smith still runs the system!
In this way, once again, the cryptocurrency system demonstrates how the world can, and should, change to provide access and independence.
It is neither belief nor faith, it is science applied through the available data.
Therefore, economics science is not just philosophy or sociology, but a science based on scientific methodology that uses human factors to determine the consequences of commercial and financial actions!
Finally, as all the parents of this science proclaim: the objective is the well-being of the population, especially those who depend on productive means or capital to survive!
Related previous articles:
https://www.publish0x.com/rationality-emotionality-and-financial-markets/the-ant-and-the-cicada-in-the-digital-world-xyyvzdm
https://www.publish0x.com/rationality-emotionality-and-financial-markets/economy-and-life-xknkzlg
