Trump Broke America’s Financial System

The US is now experiencing capital flight - this means people are taking their money out of the US and putting it into China, Europe, or Japan. The US dollar is weakening rapidly, the stock market is falling, and bond yields keep going up. When the dollar goes down in value and bond yields go up - that is a highly unusual and scary situation that signals that there is a loss in confidence in the US. This will make it prohibitively expensive for the government to borrow money, which is not exactly something you want when you’re entering into a recession and you’re passing a budget that will add seven trillion to the debt. Historically in times of crisis, the opposite happens and people put their money into the US because it’s stable – There is rule of law, the President can’t fire the head of the Federal Reserve, and generally speaking all policy in the US happens within the 40 yard lines. And so then traditionally nations and investors buy US debt, which the US then uses to stimulate the economy - and since Americans account for over 30% of all consumer spending, this then raises all ships and puts an end to the crisis. But investors just don’t believe in the US anymore, economists say that Trump has broken the country and its finances, and Noah Smith wrote that the world is treating the US like a developing nation. Trump is defying several court orders, he’s threatening to fire Powell again, and he’s enacting extremist policies across the entire nation…. People are taking their money and going elsewhere. The world has subsidized America’s way of life for a really long time and it’s all coming crashing down.

#usa #america #finance