On January 9, former United States President and current presidential candidate Trump said on a talk show that he wanted the United States economy to collapse by November because he didn't want to take over a mess. Now, with a series of clear signs, his prophecy may be coming true.
No one understands the United States economy better than I do
As we all know, the last global financial crisis was the United States "subprime mortgage crisis" in 2008, which gradually emerged from the spring of 2006 and began to sweep the world in 2007, and the economies of United States, the European Union and Japan were hit hard, and we were also greatly affected. In October 2008, Warren Buffett published a signed article entitled "I'm Buying United States", and his influence was reflected at the first time, at least in United States country, the impact of the financial turmoil gradually subsided.
But what if Buffett didn't buy United States, but cashed out and ran away? According to a number of media reports, in the first half of this year, Buffett reduced a large number of shares of Apple and United States banks, accumulating $90 billion in cash. If the "stock gods" have no confidence in the United States economy, then a "great recession" does not look far away.
Warren Buffett no longer "buys" the United States
The United States stock market plunged this round as a direct result of the lower-than-expected employment data released by the United States Department of Labor last Friday. Data showed that United States nonfarm payrolls increased by only 114,000 in July, well below expectations of 175,000. Meanwhile, United States unemployment rate rose to 4.3% in July, the highest in the last three years, triggering the "Sam's Law". Sam's law here means that if the average unemployment rate in three months is half a percentage point higher than the lowest level in the last 12 months, then the country is in a recession.
After the specific performance of major countries in Europe and the United States in the past economic crises, the law is considered 100% accurate by the industry. Although it didn't take long for the Federal Reserve and Wall Street to jump out and say that the risk of a "recession" in the United States economy is not large, don't panic. But digging deeper into the logic behind this, we will know that the problems of the United States economy are very large and long, and now there is a wave of general outbreaks, completely because it cannot be concealed.
Let's start with the employment data of the United States Department of Labor, in addition to the release of non-farm payrolls and the unemployment rate, there are two other data that are very noteworthy, they revised the employment numbers in May and June downward, this operation has appeared more than once after entering 2024. It is precisely because of the ability to "downvis" previous data and cover up the real problems that politicians can boast of miracles such as "Bidennomics" and preach that the United States economy is still strong.
"Bidennomics" has failed in disgrace
So why is there a sudden thunderstorm now? The reason is simple, Biden has withdrawn from the election, and the public's perception of the recession is becoming more and more obvious, and the problem can no longer be hidden. Normally, we only need to look at two data to judge how a country's economy is doing. One is fiscal revenue, mainly taxes, which represents how much money the government can make, and the other is fiscal expenditure, how much money the government spends each year.
If you earn more and more money, the economy will naturally improve, and vice versa. We must first recognize this underlying logic before we can talk about those dazzling economic theories and financial concepts. In 2022, United States' fiscal revenue is about $4.9 trillion and spending 5.87 trillion yuan. In 2023, it will be $4.4 trillion and $6.1 trillion, respectively. See, the Federal Reserve has raised interest rates for more than 2 years, allowing the heavenly dollar to flow back to the United States, and the United States government's revenue is decreasing, but spending is increasing.
This not only caused United States federal debt to exceed the $35 trillion mark, but also showed that today's United States has basically lost its ability to make blood on its own. It is true that a financial game can make money, but it is essentially a game of money and all kinds of goods do not grow out of the ground. And in the context of the Fed's interest rate hike, the cost of the dollar idling in the financial system is quite high, if the next, the United States is still unable to harvest a relatively large economy to return blood, then the "economic hard landing" is what is bound to happen.
They are the saviors
You see, in the past two years, the United States first tried to carve up Russia, then aimed at China, and also siphoned off a lot of money from Europe and Japan, and it has been proved that when they can't do anything with China and Russia, the United States economy itself will collapse. As for whether the timing of this collapse is before the Fed cuts interest rates in September or before the presidential election vote in November, we still need to continue to observe, in short, there is still a lot to see in the United States economy this year.