Although the latest major economic data released by the United States is slowly recovering, the data released by the US Department of Labor on December 17 shows that The number of initial jobless claims in the week ended December 12 was 885,000, well above the 800,000 expected by economists and the 853,000 in the previous week, indicating that the number of corporate layoffs remained high and still well above pre-crisis levels, followed by the Fed's december 18 interest rate meeting again warned that the new crown virus and its impact on the US economy is highly uncertain, which may affect the stability of financial markets, including US stocks, US treasuries and other US dollar assets, which are prone to a sharp decline in the value of US dollar assets.
While some will also be optimistic that initial requests are below 1 million, the current weekly figure of more than 800,000 is still more than four times the normal level before March, and much higher than the peak in any week during the collapse of the subprime mortgage financial crisis in 2008, and much more than at any time in U.S. history.
Moody's predicts that about 19 million households may stop paying off their mortgages, and economists warn that as the coronavirus spreads in the United States, the retail, hotel, restaurant and commercial property markets in the United States may be eroded again, especially if borrowers do not find a new source of income or lose their jobs at the end of the mortgage easing period, according to the latest survey cited by ZeroHedge on December 18, 60% of the survey respondents said that there is no fee to pay off the mortgage.
According to the IRS released a week ago report predicted that the situation of job loss in the United States may last for several years, the IRS believes that tens of millions of unemployment phenomena, the prospects of the US economic recovery are very pessimistic, the depression or will continue until 2027, even, the US financial website ZeroHedge said in the December 20 follow-up report that in the past six months, the United States has had cities due to debt, public health crisis, tax reasons and large-scale migration of rich people, affected by the new coronavirus, high housing prices, The impact of high debt deficits such as the debt bubble and public pensions, thousands of millionaires are really staging the American version of Exodus, the latest data show that as of December 1, more than 5781 millionaires suddenly fled Illinois, the largest exodus of wealth in any U.S. city.
A map of the migration of wealthy people in various states of the United States
Goldman Sachs has halved its fourth-quarter growth forecast for the U.S. economy last week, showing that the current U.S. economy is in a predicament caused by the continued spread of the virus. David Stockman, the father of Reagan economics, warned last week about the U.S. fiscal deficit and the Fed's monetary policy, saying that the Fed's "bankrupt" monetary policy and negative interest rate expectations are affecting the long-term stability of the U.S. economy and the U.S. dollar.
For example, Wall Street financial giant Rogers said last week that the United States will have a serious financial problem every 4-8 years, because the United States has printed and borrowed $140 trillion, making the US stock bubble continue to grow for more than a decade, but now the risk has multiplied under the catalyst of the new crown virus, and there are still many problems in the US financial system, such as inflationary pressures and pension debt.
We note that the phenomenon of the escape of the rich in Illinois is currently the largest outflow of rich people in all cities in the United States, which is not difficult to understand, and many foreign media and analysts agree that once the accelerated spread of the new coronavirus in the United States becomes inevitable, and when funds withdraw from the US market in a large way, it will trigger a crisis in the US financial market, and these events are becoming the "atomic bomb" of the US financial market. In fact, many large cities in the United States are facing the same dilemma, and this phenomenon of the rich fleeing is also evident in other high-tax states.
In this regard, former Republican presidential candidate Ron Paul once again warned the market in an interview with CNBC TV a week ago, according to the Austrian economist's business cycle theory, Ron Paul believes that the Fed itself is behind the creation of inflation and debt, it is the Fed's indiscriminate printing of money that led to the hollowing out of the value of the dollar, and finally led to some of the heavily indebted rich people in the region to flee due to the shrinking of their personal savings.
In fact, a few weeks ago, another Wall Street financial tycoon, George Soros, warned that as the secondary spread of the new coronavirus in the United States accelerates, at least $26 trillion (about 170 trillion yuan in total) will be withdrawn from the U.S. market and shifted to a more profitable market.
The latest development is that the data showing the latest international capital flows report released by the US Treasury Department on December 18 shows that as of October, global central banks have seen a significant net sell-off of US Treasuries of $1.15 trillion in 23 of the past 26 months, reflecting this view, the highest level on record.
Federal Reserve headquarters
At present, the Fed has allowed inflation to exceed 2.5%, which means that whether the Fed raises interest rates after 2023 or not, inflation will push real market interest rates up, which in turn will puncture the DOLLAR asset bubble including US stocks, housing markets, etc., which is more clear under the overlap of the current US economic policy and the new crown virus caused by the collapse of global economic growth.
Because, economists believe that the outbreak of the US property market crisis in 2008 is caused by high inflation, but at this time, once the US treasury that drives the US economy forward is slowed down by cornerstone-level global central bank investors, it means that the fig leaf of us debt has been lifted, and the US federal debt deficit will not be well hedged, and the latest data is feeding back this analysis.
According to the statistics released by the Federal Reserve, since 2009 to November this year, the Fed has expanded its balance sheet by 625%, but the cumulative total growth of US GDP during this period is only 34.87%, and another also shows that the US government debt ratio has been much higher than the level before 2008, reaching 136%, the US Congressional Budget Office predicts that it will reach 165% by the end of 2021, and the budget deficit will increase by 220%, hitting a new high since 1945.
We have repeatedly stressed that the U.S. economy is subject to U.S. debt, and U.S. debt is subject to global large buyers, once the global large buyers short or sell U.S. debt, the damage to the U.S. economy will be unimaginable, it is worth noting that the latest analysis of the U.S. quartz website believes that as one of the major buyers of U.S. debt, China may suddenly sell a large number of U.S. debt without warning, the foreign media recently quoted a Pew Research Center survey report that the U.S. debt to China is the most concerned issue of U.S. respondents. 89% said the problem was very serious. (End)