US Economy and Stock Market
The North American economy is the only one that is really strong indisputably in the whole planet, it is breaking all kinds of records it is historic with respect to itself unemployment in the United States is 3% the lowest in the last 50 years and that of the Afro-descendants It is the lowest in its history, as far as Wall Street is constantly breaking historical records in all stock indicators, it is an economy that is overheated, they thought that the third world war was coming with the election of Trump and it was not like that , really in the last year of Obama as observed Standart and pool was stable and then had a huge fall during the elections reaching its lowest low because they were afraid of Trump's victory but then realized that no.
The reality is that since Trump won what has happened is that it reached its historic highs then came a correction and continued to rise, then fell again, but if the situation is analyzed well the North American economy is strong and the risk that runs is what is called an overheating, this is when it goes so well that it can cause a problem and what they are trying to do is to slow down growth, when economies grow a lot especially in a global context and we already saw it in the case of China. see the risk of creating bubbles then what you have to do is slow down and create a consolidation before it continues to grow and can continue to work well, the idea is to prevent bubbles with these interventions to the market.
Beyond the trade war with China because China has a manipulated currency if not the most manipulated one on the planet, beyond the commercial confrontation with China what happened was that the federal reserve ie the US central bank increased the rates of interest, throughout the Obama administration the interest rate came almost to zero and this was already from the Bush era due to the crisis of 2008 and then began to rise when the economy began to go well in the Trump government, the 26 September announced the increase in interest rates and also announced that they would see more, that is what causes this fall mainly, the shares fall when the interest rate increases because the money that was in the stock market looking for a return, but if the interest rates of having dollars in the bank become more attractive practically equaling the inflation only having the money in the bank then this will move to these.
Of course there could be a collapse, but if this happened, the federal reserve will only lower the interest rate, as it did when there were other problems, lowering the interest rate, obliging the money to go back in motion. to be able to have profits, when the economic movement is very large, the interest rate starts to rise so that it becomes attractive that the money stagnates a little and this goes to the banks, in short what is happening is already designed, what they want to do is to cool a little the North American economy that is having an excellent performance, although there can be a crisis at any moment because in the world nothing is sure there is no clear risk indicator that says that a crisis is coming, a lot of theory and decades ago that we talk about the final crisis.
As long as the Fed continues to pump the market up with easy money, the perceived wealth mirage will go on.
Awesome explanation and article! I think we see the same concept in Bitcoin, to prevent a future bubble or the market treating it like a casino, we've been consolidating for months now ready for a steady growth rather than a crazy speculative one.
You got a 11.43% upvote from @bdvoter courtesy of @jacksonmil980!
Delegate your SP to us at @bdvoter and earn daily 100% profit share for your delegation & rewards will be distributed automatically daily.
500 SP, 1000 SP, 2500 SP, 5000 SP, 10000 SP.
If you are from Bangladesh and looking for community support, Join BDCommunity Discord Server & If you want to support our service, please set your witness proxy to BDCommunity.