The real picture of the US economy is bleak

The global financial system is gradually preparing for an earthquake of historic proportions which this time will not be caused by an internal crisis – like in 2008/2009 – but its cause is related to the significant shifts in the geopolitical power balances with the end of globalization under American hegemony. This is not something theoretical, but a development that will affect the economic well-being of all states and billions of citizens in the world. Central banks around the world are hoarding gold like there’s no tomorrow, fueling expectations that the era of dollar dominance could be coming to a dramatic end. It is about his imminent “death”. With the BRICS solidified in their plan to “kill” the dollar, financial experts and market experts are now beginning to imagine a world where the dollar will not play a dominant role. Gold will act as a hedge against the dominance of the dollar. In the last year, the gold market experienced historic glories, with the states – mainly those of the Global South – seized by “yellow fever”. The stimulus is a plan B against the dollar’s strong swings to offset the risks of a decline in US supremacy and a strategic move to diversify assets and foreign reserves – an area where the dollar has enjoyed an unfair currency advantage as now accepted by the entire Global South. The champion in this “gold rush” is, of course, China. The BRICS are accelerating the upheaval in international trade transactions, boosting the use of local currencies and possibly even creating their own currency which will be dominant as the group’s member states wield significant influence over the commodity market. And gold just happens to be the backbone of the plan to get us to a world where the dollar, and by extension America, will not exercise economic dominance. Central banks do not hoard gold for its yield. No, they are preparing for a scenario where the dollar will have lost its dominant role. He puts it bluntly: The US is blissfully unaware of the coming storm, with its $34 trillion debt. dollar to act like a ticking time bomb, while other countries make moves to protect themselves from the effects. The amount of US debt is over $34 trillion, a number so high that it is truly unimaginable and the markets are slowly starting to accept the truth that it is unserviceable. Meanwhile, the BRICS are ditching the dollar in their trades and betting big on gold. A smart play to stay ahead of the falling dollar and the seismic tremors of an American sovereign debt crisis. This image has an empty alt attribute; its file name is image-125-1024x666.png  

The stormy developments and the “cute” narrative

The US economy appears superficially overconfident if the international financial press and associated bullish headlines are to be believed, undisturbed by its de-dollarization plans and excessive public debt.

The jobless claims numbers are working reassuringly, pre-owned home sales are rebounding and the overall mood looks upbeat. On paper at least.

The Federal Reserve decided to keep interest rates steady, with hints of future cuts. Chief Jerome Powell literally said, “Crisis? What judgment?’

But the resilience of the labor market presents a dynamic that inhibits plans to ease monetary policy, making it a bit more difficult to navigate monetary policy.

Even if layoffs are seen in some sectors of the economy, the overall data appears to point to economic strength and stability, with employers holding on to their workforce as a lifeline. Probably because it’s…

The real estate market, which was devastated by the Fed’s anti-inflation strategies, is now showing signs of life, offering a glimmer of hope for the spring selling season.

Despite tighter supply and rising prices pushing some buyers to the sidelines, there is an optimistic narrative that things could improve.

    This image has an empty alt attribute; its file name is image-126.png   Technically, the US is still outperforming its global competitors thanks to all these superficial indicators of economic strength. But as the world’s central banks frantically buy gold and strategize for a future independent of the dollar, it’s a reminder that the global economy is far from living up to that optimistic picture.

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Trust Economics is a specialized independent economic research, analysis and consultancy business. Our team provides ingenious analysis in the macro & micro economic field, in the field of financial market, regional and sectoral analysis equally, forecasts, consultancy, specialized studies-research/projects from its headquarters in Athens, Greece.

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