It's all about the DEBTMy Comment: One of the primary reasons for the market's "Trump euphoria" is that Trump is expected to correct the economic problems with reduced government spending by cutting government programs and reducing the size of government agencies and by growing the economy. But, how much of that is really possible? The Fed does not want more economic growth since they are trying to control inflation and Trump's tax cuts and tariffs are also inflationary not to mention the retaliatory actions that tariffs will cause. And a deep recession could more than offset any fiscal spending reductions from the DOGE. One question is how do you get more economic growth from consumers and businesses that are heavily in debt. The following article elaborates on the huge amount of debt that has created the larget bubble ever in the global "everything bubble". I really think long rates would rise in the next recession as the deficits explode higher and if China stimulates in a futile effort to prevent a crisis, they would not be buying US Treasury debt which would also put upward pressure on long rates.
Consumers Are Drowning In Debt As Hordes Of Businesses Fail All Over The US | ZeroHedge Excerpts:
U.S. consumers have piled up the largest mountain of household debt in the history of the world. If the federal government was not almost 36 trillion dollars in debt, the fact that U.S. households are nearly 18 trillion dollars in debt would be making a lot more headlines. Sadly, our entire society is absolutely saturated with debt at this point. Government debt on all levels is spiraling out of control, corporate debt has ballooned to absurd levels, and consumers have been gorging on debt as if there will never be any consequences. Unfortunately, a time of reckoning has arrived, and it is going to be incredibly painful. Those that are telling you that there is an easy way out of this mess are not being honest, and we only have ourselves to blame for what is about to happen.