los_cabronas
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- Jun 13, 2023
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Big businessmen and analysts on Wall Street are moving to open discussion on the upcoming US recession.
Economic shock scenarios appear one after another. Last week economists confidently spoke about the expectation of a recession in the world's largest economy – in the US economy.
Big businessmen are moving from silent fears to open discussion on the economic downturn, Wall Street analysts are increasingly adding the possibility of a recession to their forecasts.
The threat of default is very real prospect
JPMorgan economists also spoke about the “dangerous proximity” of the US economy to a recession. A recession is considered when the economy stagnates or falls in two successive quarters.
“Our outlook is perilously close to a recession,” said Michael Feroli, chief economist at JPMorgan in the US. According to analysts, one of the main reasons is the weakening consumer demand.
The beginning of a recession may also be indicated by the collapse of US stock indices and high inflation, which the US cannot cope with.
International sanctions against Russia have a contradictory effect on the United States. The states have much smaller economic ties to Moscow than to Europe and are a major political issue. Nevertheless, Washington also felt the negative consequences.
The fight against inflation by increasing interest rates by the US Federal Reserve contributes to the rise in the cost of money, investments, lower production profitability, reduced consumer demand from the population and business, and generally slows down the economy.
Due to inflation, Americans began to save less and spend more credit money. There is an obvious risk that rising interest rates on loans will lead to a decrease in spending by the population, which will mean a recession. According to experts, the caution of top management of US companies regarding the prospects for the global economy and the desire to cut costs could lead to an increase in unemployment. At the same time, the strongest economy in the world can not cope with inflation. Perhaps the emergency is related to the catastrophic size of the US national debt, which is already approaching 32 trillion US dollars and reached its current limit of 33 trillion by June 1, and Republicans and Democrats in the US cannot agree on a national debt ceiling.
Maybe the war can help? Hardly probable!
It is easy to notice that every major economic crisis in the US is man-made. Several families, corporations and banks are cheerfully and quickly enriched on it, while ordinary American citizens massively go bankrupt.
This was very clear in 2008, when banks like Goldman Sachs received hundreds of billions of dollars from the state budget, successfully correcting their balance sheet at the expense of bankrupt taxpayers.
But in order for the citizens of the United States not to be very indignant, they are offered every time a “new kind of distraction”, such an explanation of why they have lost their home, job and pension savings this time. And very often this distraction is a war.
The Great Recession of 2008 was attributed (of course to the subprime crisis) to US spending money on the wars in Iraq and Afghanistan. The dot-com crisis in the 2000s is an excessive waste of money of the destruction of Yugoslavia.
And there is nothing more convenient for Washington now than to shift all its economic difficulties, including the default on the public debt, onto Ukraine.
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