In light of the growing inflation in the UK, our team sat down with David Ginsburg, Investment Director at SolidusX, to discuss the importance of taking advantage of the situation and investing now.
Q: Thanks for joining us, David. Let's start things off. Prices are skyrocketing in the UK right now. What's been the reasoning behind that?
A: Thanks for having me! Well, where to begin? It's hard to narrow it down to one single factor. Obviously, one of the most significant geopolitical events in the past few decades, Russia's war on Ukraine, is a huge reason why. Energy prices are soaring because of a newfound surge in demand after COVID. On top of that, Ukraine provides a monumental amount of wheat and other resources. Naturally, this leads to an increase in food prices across the board.
Countries were in lockdown during Covid, which affected economic activity. Someone needs to pay the bill. Regarding the balance between saving human lives and minimizing the economic impact, I think there was a better path. Yet, I would want to be off the decision-making desk.
Q: Talk us through the problems with supply chains as well.
A: The supply chains have been an issue for several years. The debilitating effects of the COVID-19 pandemic disrupted supply chains around the world. With countries around the world imposing strict lockdowns and closing borders, eCommerce boomed in demand while supplies diminished heavily. Even now, China still has stringent restrictions regarding the COVID-19 pandemic. The culmination of the Russian war and supply chain issues don't bode well for inflation.
Q: So, you've got a British population depressed and scared of the rising prices. What does their future look like?
A: I know things are less than ideal right now. The instability of the UK government changes in recent times has yet to fill people with much certainty. We are in a tense geopolitical situation, but this won't last forever. European energy ministers reached an agreement to put a halt to the rising electricity prices. Yes, we're in for a more brutal winter than most, and we need to brace for it.
I truly hope the new government will help with economic stability and, together with the BoE, lead a responsible approach to curb inflation. In our line of work, we always talk about inflation as if it is a living organism, a beast trying to eat up the middle class.
In the last couple of years, we've witnessed a change in how most people think about money and what they do with it. Brexit, then Covid, and now rising inflation led to a liquidity crisis amongst UK banks. Smart Britons looking to maintain and create value for their money voted for off-shore accounts and Crypto related investments. Moving away from the British Pound and towards return on investment.
Noticing this multi-billion dollar shift in where money is stored, UK banks began to focus on protecting their liquidity, restricting clients' money movements and discouraging them from making any investments. But you can count on them offering you a loan every chance they get.
Oddly enough, Britons are left with a choice between protecting their bank's bottom line or protecting their financial future. My responsibility is for the individuals we work with and not for the well-being of the British banking system. Seeing the connection between Crypto and financial independence, I urge people to open a crypto wallet and have more control over their money..
Q: You've been a proponent of investing during these difficult times. Could you give us some more information on that? What's your reasoning behind that?
A: Most people today are so engulfed in current events that they simply cannot think far ahead. Let me be clear, this is by no means criticism. It's almost impossible to disconnect from all the problems around the world. Especially with social media constantly bombarding us with new information. Economically, the average person is feeling the brunt of increasing living expenses. However, the markets are still there. All markets.
We emphasize to clients that they should stay dynamic while we help provide information about exciting market opportunities. Climate change and ESG are long-term factors we consider as well. Inflation and volatility are similar to rising sea levels; you need to sink or swim. If your strategy is keeping money passive in ISAs, Cash, or traditional investments, you should be prepared to watch your hard-earned money drown.
With the current market atmosphere, you should ensure your money stays active and honed in on short-term trading opportunities. There's plenty of money to be made, given that you know what strategies to follow and what to look out for.
Q: You're an Investment Director at SolidusX. Can you give our readers some insight into what SolidusX does precisely?
A: We operate from London and provide financial services to our clients worldwide. Put simply, we connect people to global financial markets and guide them through it by explaining the platform and how to invest and providing general information about market events.
We deal with traditional forex, CFDs, and commodities, but we've also managed to offer our clients access to cryptocurrencies. We offer Tier 1 liquidity, multiple state-of-the-art trading platforms, and our algorithmic analysis tool, Solidifyre.
If you care about your financial future, you should worry about your money losing value to inflation or not doing anything because it is not invested properly.
You want to embrace volatility. You can't go surfing when there are no waves, and surfing is fun, especially when you got someone to teach you how to do it and when catching a wave (in this metaphor) means collecting a nice profit.
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