Fed is Trapped as QE Assets Hit $7.6 Trillion and Wall Street wants More QE 1.9 trillion$ is only the amount from the current proposed stimulus bill.
As a result, the deficit will balloon to eye-popping amounts. The U.S. national debt will swell to nearly $30 trillion.
The $1.9 trillion spending package will grow the U.S. budget deficit to $4.2 trillion in 2021 and put the government on a path to spend more money in one year than the previous 200+ years.
Biden and company are set to borrow more money over the next 12 months than the U.S. government borrowed to finance the Revolutionary War, the Civil War, World War I, World War II, and the Cold War,” Stephen Moore, former economic adviser to President Trump, wrote in his Committee to Unleash Prosperity newsletter.
It is estimated that the current deficit ( without the 1.9trillion ) will be 2.3 trillion, so the total for 2021 will be 4.2 trillion $. The question that I consistently ask is, who is going to buy this debt at current interest rates when any buyer is guaranteed to lose money in real terms! Only one, and that is the FED. And when this happens, we will be on a slippery slope to a currency collapse. Bonds are signaling inflation.
U.S. stocks staged a rebound rally on Monday, with each of the S&P 500, Dow and Nasdaq jumping as retreating Treasury yields and vaccine optimism boosted risk assets. Each of the three major indexes increased by more than 2% around noon in New York, and the small-cap Russell 2000 outperformed with a gain of nearly 3%Villere Balanced Fund Portfolio Manager, Lamar Villere, and SVP and Head of Research & Strategy at Global X ETFs, Jay Jacobs, joined Yahoo Finance Live to discuss.
On the topic of investing, Warren Buffett said in his 2021 annual letter that ultra-low interest rates around the world diminished the appeal of the bond market. Mohamed El-Erian, economic advisor at Allianz and Gramercy and president at Queens College, Cambridge, joined "Squawk Box" on Monday to give his reaction on Buffett's letter
In his annual letter to shareholders, Berkshire Hathaway's Warren Buffett admitted mistakes, commented on the markets, offered some folksy wisdom and talked up America. CNBC's Becky Quick breaks down the contents of this year's letter.