The surge in bankruptcy cases in the United States may currently be in the most severe stage of recession
Danielle DiMartino Booth, CEO and Chief Strategist of QI Research, stated that the United States may currently be in the most severe stage of an economic recession.
DiMartino Booth stated that the recent surge in bankruptcy cases in the United States is similar to the situation during the global financial crisis.
He pointed out, "We have seen 19 companies with debts exceeding $50 million go bankrupt, with the highest number after the pandemic being 23. The current interest rates take us back to the era of financial crisis. We have also seen small-scale bankruptcies that are permeating into personal bankruptcies, as American households have too many credit cards, cars, and personal loans, not to mention mortgages
DiMartino Booth explained that the United States is currently in an "economic recession" that may begin in April 2024. She pointed out that the negative correction of private enterprise employment data is a key indicator. She added that private enterprises actually lost 28000 jobs in October. Since January 2022, these downward revisions have become 'systematic' and have been ongoing.
DiMartino Booth pointed out that after cutting interest rates by 75 basis points since September, the Federal Reserve will continue to cut rates in response to the economic recession. She added that due to recent data revisions, "Federal Reserve statisticians are losing their sanity," which requires them to recalculate their models and may push them to further cut interest rates.
DiMartino Booth pointed out that during the Trump administration, more "negative data" will be released to further reveal the extent of the economic recession.
She said, "We know that most government statisticians are inherently very left leaning, which may be one of the reasons why we haven't seen bad data coming out. But looking ahead, they will be more willing to let negative data taint the Trump administration. We will realize that we are in a recession. This raises the next question, when will we be able to get out of this predicament
In view of this, DiMartino Booth suggests adopting a defensive stance in the current economic environment. She suggested investing in companies that will continue to pay dividends regardless of what happens in other parts of the world, as well as raising funds through short-term treasury bills. She still remains optimistic about gold, believing that it is a "reasonable choice for diversified investment and defensive positions".
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