American Economics Thread
- Thread starter Bernard
- Start date
The US media and pundits are behaving more and more like Indian ones.
How much would one expect home loans to up by if Bond rates hit 2% as some are speculating? I also read that Morgan Stanley estimates American households had ab excess of 2.3 trillion dollars in savings. So why the handouts.
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30 years mortgage fixed rate would probably go up to 3.6%-3.7% if bond rates hit 2%. In a normal year. 49% of Americans have been living paycheck to paycheck. After the covid, 63% of Americans are living paycheck to paycheck. That's why check cashing and pawn shop is a good business in the US.
Dont forget that Biden also wants an infrastructure bill which could go up to 4 trillion dollars... i am really curious to see who will buy these bonds
They are still shopping like crazy at Costco and Walmart.
It is more likely a 2-4 trillion dollar infrastructure bill that covers over 10 years. However, Biden can't justify his infrastructure bill unless he increases tax. He just doesn't have the vote to pass it without a tax increase. As for debt, Fed is standing by to absorb any excess.
That's why Americans love credit cards.
In an alternative universe, China would help build the next generation infrastructure for the US, with its technologies and experiences at the most competitive price. My Chinese friends ask me why China would bother, given the hostilities towards China in the US? I said it's better investment than the trillions of T-bills & T-bonds that China has invested.
Of course, the US wouldn't allow it because it may constitute a national security threat, like the contract to supply DC with Chinese metro cars built in the US by Chinese companies. Who knows, the Chinese might plant some bugs to eavesdrop on Congressmen talking highly confidential subjects on their cellphones while riding the DC metro to the Capitol. Yeah, I know it sounds a bit farfetched, but one can never be too cautious when its comes to national security matters - you know, the Boeing 767 originally ordered for the Chinese presidential aircraft was later found to be fully-bugged while being furnished in San Antonia almost two decades ago.
OK, so this national security thing is being blown out of proportion, but then again there is also the pride thing, even for a declining empire.
You'd be stupid not to buy before the dollar depreciates.