2024 is the year of the U.S. election, and it is also the year of the U.S. economy.
Some people say that the recession in the United States has been crying out for several years, but it is still strong, which disappoints those who sing about the United States. Those who hold this argument do not understand the current state of the US economy at all, and they do not even understand even the most basic common sense.
On January 5, local time, U.S. Treasury Secretary Janet Yellen said in an interview with CNN that the U.S. economy is achieving a long-sought "soft landing".
She highlighted that high inflation has been subdued and the labor market has not been severely damaged, "which is historically unusual".
In economics, a "soft landing" is when an economy gradually slows down its growth rate after a period of rapid growth, rather than suddenly falling into recession.
A soft landing also usually means that the crisis has accumulated to a dangerous level and has been gradually resolved over a longer period of time, rather than a sudden thunderstorm.
This shows that the financial and economic crisis facing the United States today, Americans actually have a very clear understanding, and it is not as many people say, they are trying their best to cover up the truth, but Yellen's identity, she can't say that we are about to collapse, right?
There are many people who say that today's U.S. economy is so magical that even the United States' own economists can't explain it clearly, which is not a fact, and even netizens around the world can see things clearly, how can they not understand it?
It's just that as Americans, they can't directly say that the United States is about to collapse, at least most people can't say it, and only people with the status of JPMorgan Chase CEO Dimon dare to say a few words of truth, which is the truth of freedom of speech in the United States.
No country in the world can allow it to eat it every day, and it is desperately exaggerating the crisis and declining the economy. Since you think the United States is bad, you can not be an American, this logic is the same all over the world.
In 2024, the U.S. economy will face three major crises, and they are also three major suspense, and they are all like mirrors in their hearts. These three crises are the suspense of the US dollar interest rate cut, the life and death of the US debt, and the economic recession.
Some people are still defending the United States, saying that the economy is very strong, and we only need to look at a few statistics and everything will be revealed.
In 2023, U.S. GDP is expected to grow by 2.6% and the unemployment rate is expected to hit a record low of 3.4%, but electricity consumption will fall by 3% for the year. In fiscal year 2023, the total revenue of the U.S. federal government decreased by 9.3% year-on-year, with the most severe decline being a 17% decline in personal income tax revenue.
In December 2023, there were 762,000 more part-time jobs and 1.5 million fewer full-time jobs in the United States. Everyone is no longer unemployed, because they are not registered as unemployed, and the bottom directly does not work and relies on the US deficit to eat relief.
These data are indeed magical enough, and now the US economy is like the emperor's new clothes, everyone knows that a recession is coming, but few dare to tell the truth.
Is there any suspense about the US dollar interest rate cut? There is no longer any suspense, and most US institutions predict that the US dollar will definitely cut interest rates in 2024, but sooner or later and the magnitude of interest rate cuts, some people are aggressive and some are conservative.
Because they all know that the superficial prosperity of the US economy, which Yellen called a soft landing, is entirely the result of the US fiscal deficit in the past two years.
In other words, while raising interest rates to tighten the global currency and promoting the return of the dollar and manufacturing, they are also releasing water to domestic enterprises and people on a large scale to protect the domestic economy.
When Biden first took office in 2021, the size of the U.S. debt was only $23 trillion, and now it has soared to $34 trillion, an increase of 11 trillion in three years, which is a historical record.
Where is all this money spent? Don't Americans know?
However, the high fiscal deficit model of the United States in 2024 is no longer sustainable, and the Republican Party's constraints are only superficial, and the heavy cost burden and unsalable US debt are the truth.
If the U.S. government can still increase its fiscal deficit by 5 trillion in 2024, and the money can be spent as much as it wants, does the Republican Party still need to fight for a budget of no more than 100 billion for the border wall?
Therefore, in 2024, when the three major crises of the dollar, U.S. debt and economic recession collide together, and even break out in a concentrated manner, it will really be enough for Americans to drink a pot.
As the Secretary of the Treasury, Mrs. Yellen knows better in her heart that she must sing more about the U.S. economy and fool U.S. and overseas investors into continuing to buy U.S. bonds.
As long as the U.S. debt continues to be sold, the fiscal deficit continues to be maintained, and some water continues to be released, as long as we find a balance point to continue the life of the economy, and hold the crisis from breaking out in a concentrated manner, we can survive 2024.
As for what will happen after 2024, it is not known who will be president. If Biden is not president, the current administration team will be dissolved, including Yellen herself, and she will have to go home.
However, if the U.S. debt problem cannot be solved and the fiscal deficit is yellow, the only alternative is to cut interest rates on the dollar.
Even if the dollar cuts interest rates, the US financial and economic crisis may not be able to bear it, because the interest rate cut only reduces the cost of funds, and is not as direct as the direct release of the fiscal deficit.
As a simple example, if a company borrows too much and the interest rate is too high to afford and is about to go bankrupt, can it save it by lowering the loan interest, or can it just give it $100 million as soon as possible?
This is the case in the United States today, which is already on the precipice of the Great Recession, and the difference is whether you go down with a paraglider (soft landing) or jump straight down (hard landing)?