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Apr 27, 2020 | Media Coverage

Simon Bishop in the Hong Kong Economic Journal

Simon Bishop, Hedging Director Western Union Business Solutions, shares his thoughts on how this crisis is different from others in the past, its impact on technology, and who stands to gain once the crisis is over.

The crisis “is different this time”

Mark Twain supposedly said: “History doesn’t repeat but rather it rhymes.” But while there’s no evidence whether the respected writer did or did not say this, the logic behind the statement stands. History tends to move in cycles – and often the cycles seem very similar. It’s for this reason that the phrase “this time it’s different” is often met with scepticism from financial market professionals. The same scenarios play-out time and time again in markets. It usually isn’t different.

So, are we taking a big risk suggesting it’s different this time? From one perspective, it’s very different. Global slowdowns are not usually triggered by international governments voluntarily shutting down their economies. Usually, it’s hard to state an exact reason for an economic slowdown. The global economic cycle tends to move in a clear, traditional pattern, but with a clear rhyme or reason.

The boom-bust cycle is very well known but it’s often hard to see why a boom has started. Or why a bust occurs. More generally, it’s usually due to prices. Low prices create opportunity which drives a boom which pushes prices higher. And then high prices create the bust. On this occasion, however, it’s clear what has driven the shutdown. We’ve all agreed to it for the common good.

Read the entire article at the Hong Kong Economic Journal (Chinese)