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In a recent commentary written by Mike Landry published on The Western Journal, Landry expressed his view on the "truth" about US debt and how the US national debt will affect the next generation.
Forty percent of US dollars (USD) in existence have been printed in the last 12 months, as a result of pandemic and COVID relief plans to stimulate the economy (Louise, 2021). This has caused the USD to plummet dramatically, and increased inflation rates are expected, as we see the highest monetary supply in history. The USD depreciation may likely continue in 2022, with the US treasury secretary recently warning congress about the US Debt.
We can see how the ongoing pandemic has affected US dollar value from the USD index (DXY chart) since 2020.
DXY levels peaked at 102 in March 2020, and since that peak the price has continued to drop. Prices are likely to drop further if US congress raises the debt ceiling, as this will increase government spending, which could result in the printing of more money.
As the USD is losing value, people around the world are looking for alternative stores of value. While some people have chosen the crypto market, others went to the stock market. We can see big portions of the stimulus checks going into the US stock market (Phillips, 2021), raising S&P500 to its all-time high at USD4506, with some experts saying this could be the biggest stock market bubble of the 21st century. When this bubble bursts, it could trigger a stock market crash and a general economic recession, or even a depression.
While the results could be catastrophic, some traders are waiting for the chance to short the market and pocket some profit from this event.
CFD brokers made short position accessible for everyone, so retail traders can easily place short positions and be able take advantage of stock market bubbles if the speculators are correct. However, there is no accurate prediction as to when this could happen.
Read the full commentary by Mike Landry here:
Read the full article by Nickie Louise here:
Read the full article by Matt Phillips here:
https://www.nytimes.com/2021/03/21/business/stimulus-check-stock-market.html
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