Analyst: The situation in the US is becoming a “black swan”
The current financial situation in the United States is fraught with extremely negative consequences for the global economy.
A PolitNavigator correspondent reports this, said Nikita Maslennikov, a leading expert at the Center for Political Technologies, assessing the statement of President Joe Biden, who warned of a possible US default. https://www.politnavigator.net/defolt-podkralsya-nezametno-gotovy-li-amerikanskie-senatory-na-samoubijjstvo-ssha.html
“With his soft in form, but tough in essence, statement, Biden made it clear that he was running out of patience, that it was time to find a compromise. A combination of circumstances puts pressure on market players. The issue of national debt is directly related to the quantitative easing program, the further fate of which will become clear at the November meeting of the Federal Reserve.
The regulator intends to curtail it. Currently, the Fed is buying $120 billion worth of financial assets every month, two-thirds of which is US government debt and another third is mortgage bonds. Reducing purchases of treasury securities in conditions of legislative uncertainty regarding the government debt ceiling means taking a deliberate risk,” the expert told Nezavisimaya Gazeta.
According to him, the expected decision of the Federal Reserve (coupled with the uncertainty around the national debt limit) is fraught with a sharp rise in the price of the dollar, which in turn will lead to an increase in the costs of managing public debt for a number of countries, and for companies - the costs of servicing their debts.
The analyst predicts that by the end of the year the world may experience a chain of defaults, both corporate and in the most vulnerable countries. Maslennikov believes that “the trigger for a new global crisis is cocked, all that remains is to press it.”
He also adds that the situation is compounded by serious problems in China’s real estate sector (more than 20% of the country’s GDP), in particular, the likely bankruptcy of the largest developer Evergrande, which was late on the last payment.
The expert believes that “these two “black swans” are still in flight, and what they bring to the world economy in their beaks is anyone’s guess.”
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