Originally Posted by
Dr_Tran
Take the news daily, but think by the weeks or the months ahead.
Imagine Vietnam is a closed system. USD has not been newly generated at all in the last few weeks, it's just moved around from one hand to another.
The whole closed system has some "leaks", however. There are illegal money transfers out of VN, foreign smugglers buying gold, USD to take back to their country.
Overall, the closed system is leaking USD and gold out of it - CAPITAL FLIGHT. Less coming in than getting out. The system is shrinking, collapsing upon itself. Less USD and gold in VN now than 4 weeks ago, even 1 week ago.
Capital in USD and gold is diminishing. Less capital => less investment => higher unemployment => lowered GDP.
Using a metaphor in medicine, previously the VN economy was mal-nutritious, but now it is under-nutritious.
It's not a good way at all to help a mal-nutritious patient. You just simply create a whole new set of problems, but it's worse than before, MUCH worse. Wait 3 months when the decreased investment comes into effect, resulting in much higher unemployment and much lower output => SUPER HYPERINFLATION.
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