Over the past decades, many developed markets in the world have been highly dependent on debt to develop their economies. The United States is very obvious, and it has also formed many Americans' habit of not thinking ahead, spending ahead of time, and getting addicted to debt. According to the report on the US family economic status released by the Federal Reserve for two consecutive years (more than 12000 people are surveyed), about 40% (nearly half) can not get 400 dollars in cash for emergency use, or need to borrow money or sell things. Coincidentally, things have made new progress.
According to us financial website Zerohedge12 21, GOBankingRates's 2019 savings survey shows that about 70% of Americans' savings assets are less than 1000 dollars, as Statista's Maria Maria Vultaggio details. Last month, 846 American respondents showed that 45% of them did not have any savings.
The discovery puzzled Bruce McClary Bruce McClary. He said, "I am very disturbed that people can not spend 1000 dollars in savings accounts to pay for their debts without debt. Moreover, the total amount of credit card debt in the United States has already broken through the trillion dollar mark and is constantly breaking the record. " This is further evidence of a microcosm of the US economy's debt addiction that has been mentioned many times by the BWC network.
The other side of the story is that many Americans are paying too high a price for debt addiction. For example, at the beginning of this year, more than 3000 millionaires fled from Illinois, one of the world's largest wealthy outflows. According to the latest census data from the United States Census Bureau, more than 100 thousand people have left in the past 5 years, and one reason for the massive withdrawal of the rich from the United States is that Illinois is in debt crisis.
There is another notable phenomenon in the wake of the massive withdrawal of the rich in the United States. That is, in the United States, over 500 thousand Americans are homeless any night. In recent years, the number of homeless people in some American cities has continued to soar. For example, according to the census of the Losangeles homeless service authority, the number of homeless in Losangeles increased by 16%, the highest level in 10 years.
All this means that Americans are paying high losses and costs for the habit of debt addiction and hard work. This is also a sign that the US economy is highly dependent on the potential risks of debt. At the same time, the US federal and some enterprises continue to burst their debt deficit, which has also accumulated a debt crisis and a financial crisis for the US economy.
Another progress is that data show that in the past ten years, the proportion of US corporate debt to GDP has increased from 40% to 47%. "The new debt king" said that the ratio had always collapsed during the recession. "When this happens, it is difficult to get out of the predicament." He also warned that historical data showed that the weakening of the US dollar was related to the current account and the budget deficit. When the total share of GDP increases, the US dollar depreciates. "As the deficit continues to expand," the dollar will "synchronize" and weaken further, he said. At the same time, the weakness of the US economy may cause the US dollar to fall sharply. US dollar and other dollar assets will also face a potential sell-off.
At the same time, for the Federal Reserve since the middle of September, opened a large "water release" buy back phenomenon, the group's response to the dollar crisis in the market is "a very bad signal", indicating that there is no liquidity to accommodate the repo market. In fact, this is not the first time the new debt king issued a warning to the Federal Reserve. He said a few weeks ago that the size of the US debt in 2018 has exceeded the nominal GDP. If not for debt growth, the US economy in 2018 would be negative. Once the US Federal Reserve releases large quantities of water, it may push the US financial market to the "Yin-Yang demarcation line". We are heading for hell.
At present, the US debt financing model supported by the Fed has indeed entered an unsustainable channel. Zerohedge pointed out earlier that the Fed's water supply ushered in a satirical peak, that is, the Fed acknowledges the Fed's "letting up" at this time or the collapse of the US economy. Scott A. Wolla and Kaitlyn Frerking warned in the paper of the Federal Reserve Bank of Saint Louis that the Fed's own policies could lead to the collapse of the US economy. In short, Keynes doctrine is not a panacea for all problems, and less debt is a good thing, but too much debt can become a problem.
And another progress is that as of December 22nd, the total amount of US federal debt amounted to nearly US $23 trillion and 140 billion.
In the past three years, the total amount of US federal debt has increased by an astonishing 32 thousand US dollars.
Another phenomenon is that since the 80s of last century, the total amount of US federal debt has doubled on average every 8 years. That is to say, by the end of 2027, the total amount of US federal debt may seem to reach US $46 trillion and exceed the level of 250% of GDP. Then, the direct problem is that if the main buyers of the world do not favor the US debt, the US Treasury bonds or the US Treasury bonds will be faced with the risk of Liquidity Dilemma.
At present, such a phenomenon or happened in advance, this is also a long-term concern of the Fed. For example, in the 14 months ended October this year, the total selling of US debt by the global central bank amounted to US $348 billion. The positions of major global central banks on US debt have also become net selling for months. In the view of Masahiro Kawagishi, chief investment officer of Nomura's fixed asset management department, the US dollar may no longer be the main currency.
It is worth mentioning that between June last year and October this year, China (mainland) reduced its US debt by about US $91 billion 900 million. The total sales of nearly 100 billion US debt has exceeded the sum of $84 billion 900 million of US debt currently held by Germany. Wall Street commodity king and billionaire Jim Rogers believe that under the heavy debt problem, the United States is facing a more serious crisis than the financial tsunami of 2008, and the initiative is in the hands of big buyers.
As for China's total sales of nearly 100 billion U.S. dollars, Russian satellite news agency reported recently that according to observers, China is likely to sell up to US $700 billion of US Treasury bonds. Dario, the founder and billionaire of the world's largest hedge fund bridge bridge, recently predicted that China would not reduce the possibility of a larger and larger US Treasury debt reduction. I think or become a reality. This will be a great worry for the Fed.
Russian media further explained that if the market has become accustomed to the reduction of US Treasury bonds, then a large number of major holders in a short time will be unsafe. However, it is worth pondering that the US Treasury Department hinted earlier or would consider issuing 50 - year or 100 - year treasury bonds. This means that the federal government will borrow more money from the world. Then, once the US debt is not available, the US federal government will have a liquidity exhaustion sooner or later only if the Fed is self-sufficient. Then the deficit risk of the US economy in the trillions of dollars a year will not be hedged.
Zerohedge quoted experts as saying that those who enjoy paper benefits in the US dollar asset bubble will end badly. The Fed's balance sheet will continue to grow, and we will face the US dollar crisis and sovereign debt crisis. (end)