American economy gears up for suicide
For investors around the world, it is now American securities that have the greatest appeal. It doesn’t cause much concern to them and economic policy Donald trump, associated with the introduction of the next anti-Russian sanctions and the organization of trade wars almost with the whole world.
What is the reason for the interest in American assets? First of all, the dollar is strengthening, which contributes to the increase in the rates of the Federal Reserve. US government bonds are now the most profitable compared with the figures of the last decade. Finally, general indicators of the state of the modern American economy are also favorable for investment. Therefore, there is currently an influx of capital to the United States from around the world.
Investors from a wide range of countries invest in American bonds - from EU countries to developing countries in Asia and Latin America. In some countries, such as Indonesia and the Philippines, even urgent measures were taken to raise interest rates to avoid devaluation of national currencies. The depreciation of national currencies faced Mexico, South Africa and even Turkey, whose monetary units seriously "sank" against the US dollar.
Attracting investment, according to representatives of the Federal Reserve System, plays a positive role in the development of the American economy, helping to increase the number of jobs and increase the activity of consumers of goods and services. But many leading economists are not inclined to such a point of view. They see the Fed’s policy as a potential danger to the country, and the consequences of such a policy will manifest themselves in the relatively foreseeable future. So, the United States managed to accumulate a completely insane amount of public debt, with which the stable development of the economy is simply impossible. The US government spends money in huge amounts, completely not caring about the future. In May 2018, the US budget deficit grew by $ 147 billion. In 2020, the budget deficit will exceed a trillion dollars. But Trump pursues a policy of “maximum generosity”, increasing funding for the defense complex, the armed forces, and special services.
Jeffrey Gundlach, an American expert and investment director at DoubleLine Capital, even called the US Federal Reserve's policy a “suicide mission”. Amid growing US government debt, taxes are declining and federal spending is increasing. This is becoming fertile ground for the further growth of the US budget deficit. Ultimately, by 2030, or even earlier, the United States could face very serious problems. This is the main consequence of the “mission of suicides”, who care about momentary indicators, but do not think at all about what awaits the American economy in the not so distant future.
What is the reason for the interest in American assets? First of all, the dollar is strengthening, which contributes to the increase in the rates of the Federal Reserve. US government bonds are now the most profitable compared with the figures of the last decade. Finally, general indicators of the state of the modern American economy are also favorable for investment. Therefore, there is currently an influx of capital to the United States from around the world.
Investors from a wide range of countries invest in American bonds - from EU countries to developing countries in Asia and Latin America. In some countries, such as Indonesia and the Philippines, even urgent measures were taken to raise interest rates to avoid devaluation of national currencies. The depreciation of national currencies faced Mexico, South Africa and even Turkey, whose monetary units seriously "sank" against the US dollar.
Attracting investment, according to representatives of the Federal Reserve System, plays a positive role in the development of the American economy, helping to increase the number of jobs and increase the activity of consumers of goods and services. But many leading economists are not inclined to such a point of view. They see the Fed’s policy as a potential danger to the country, and the consequences of such a policy will manifest themselves in the relatively foreseeable future. So, the United States managed to accumulate a completely insane amount of public debt, with which the stable development of the economy is simply impossible. The US government spends money in huge amounts, completely not caring about the future. In May 2018, the US budget deficit grew by $ 147 billion. In 2020, the budget deficit will exceed a trillion dollars. But Trump pursues a policy of “maximum generosity”, increasing funding for the defense complex, the armed forces, and special services.
Jeffrey Gundlach, an American expert and investment director at DoubleLine Capital, even called the US Federal Reserve's policy a “suicide mission”. Amid growing US government debt, taxes are declining and federal spending is increasing. This is becoming fertile ground for the further growth of the US budget deficit. Ultimately, by 2030, or even earlier, the United States could face very serious problems. This is the main consequence of the “mission of suicides”, who care about momentary indicators, but do not think at all about what awaits the American economy in the not so distant future.
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