Two momentous events occurred simultaneously in the US economic space, somewhat, to put it mildly, altering the picture of the world: just a brief reminder that the obviously recession-stricken economy belongs not just to a superpower. But a superpower that is still, justifiably enough, claiming the role of global leader.
And accordingly, directly influencing the economy of the whole not so big globe, as it turns out.
However, let’s go in order.
First of all, the authorised economic analysis office of the US Department of Commerce issued a press release, according to which the GDP in the second quarter of 2022 decreased by 0.9% year-on-year. After a decline by 1.6% year-on-year in the 1st quarter, the US economy thus decreased for the second quarter in succession. Which, in accordance with the technical definition of a recession according to US law. No matter what Joe Biden or even Barack Obama says about it, if someone looks like a cat, walks on four legs, catches mice and meows and purrs, then you should not create unnecessary entities – it is most likely just a cat.
Secondly, according to a statement on the website of the US regulator, the US Federal Reserve, which acts as the US central bank, raised its benchmark interest rate for the second time in a row by 0,75 pct, to 2,25-2,5%. Which, by the way, should only spur the recession process, scientifically speaking. But the Fed is not really worried about this at the moment, if even the “official” inflation rate, which passes through the gloss of the various financial institutions, is already approaching 10% per year. And this is clearly not happening “in the moment”, but represents a very long-term trend that the Fed is feverishly trying to curb.
And despite the fact that this inflation is obviously not so much monetary as it is complex (inflation in US commodity markets, for example, is much higher), the US financial regulator has no other means than monetary ones to fight this scourge.
But there is, to my taste, a rather unrealistic hope to saturate the economy with outside capital (and the high interest rates should make it even more attractive). But time will tell how successful this can be.
But even in Europe, which has been ravaged by the energy crisis, the necessary amount of capital has been slow to flow into the “safe haven” of America.
What this means.
First of all, the crisis, now fading and now flaring up again, which has been raging in the global markets since 2008, is moving to a new quality. And gradually it is no longer manageable: it is no coincidence that the White House is trying hard to deny the recession that is obvious to the whole world, in the best traditions of the late Soviet Politburo of the CPSU Central Committee, headed by Comrade Gorbachev. And Biden never even uttered the word “recession” in his speech on the economy, and quite defiantly.
Secondly, the story is more than long, dating back at least to 2008 (that’s just in the “open phase”). Consequently, the “Ukrainian crisis” could not have been not only the cause but even the trigger of the current formidable events: on the contrary, it is a rather usual way for the US to try to solve crisis problems through a small or even large-scale war.
And they even seem to have achieved some results (the flight of a certain part of European capital to the USA). Except that they do not seem to have achieved enough.
Nevertheless, the US is – and we can see it – quite aware of the problem.
And they will continue to try to solve it, even if they have to bankrupt their own allies to do so.
Otherwise, the probability is not illusory: they might have to go peacefully on their own. And it means that already in the shortest historical perspective we are, of course, in for a very interesting, but at the same time, unfortunately, very anxious times.
Dmitry Lekukh, RT
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