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HSBC Holdings (00005.HK) repurchased 2.7 million shares for HK$267.8 million on August 18.Chow Sang Sang (00116.HK): Profit attributable to owners of the Company from continuing operations for the six months ended June 30, 2025 is expected to be between HK$900 million and HK$920 million, compared with HK$520 million in the same period of 2024.The onshore RMB closed at 7.1820 against the US dollar at 16:30 on August 19, down 28 points from the previous trading day.1. State Street: We expect Powell to pave the way for rate cuts starting in September and continuing through the end of the year. 2. ANZ: Powell may hint at a return to interest rate normalization at the Jackson Hole symposium. 3. UBS: Given last weeks data, Powell may be willing to signal a September rate cut at the meeting. 4. UniCredit: We expect the Fed to return to its pre-2020 rhetoric. On the surface, this move has a slightly hawkish tone. 5. Russell Investments: The Jackson Hole meeting may cool expectations of a Fed rate cut, making a September rate cut "possible" rather than "certain," and the cut will be 25 basis points rather than 50 basis points. 6. ING: The recent expressions of concern by three Fed officials (Daly, Cook, and Kashkari) about the deteriorating job market appear to be a precursor to a more dovish official stance at the Jackson Hole symposium. 7. Oxford Economics: We expect the Fed to remain on hold until December, and we expect Powell to remain tight-lipped at Jackson Hole. He may be more like an owl - waiting and watching - rather than a hawk or a dove. 8. MUFG: The risk of the Jackson Hole meeting is that Powell may not provide a clear signal on the timing of the next rate cut, thereby buying more time for the Fed to continue to evaluate the upcoming data before the September FOMC meeting. This may help curb the downward pressure on the US dollar in the short term. 9. Bank of America: We are skeptical about the Feds interest rate cuts this year. Powell said in July that he would be satisfied with low job growth as long as the unemployment rate remained in a narrow range. Now it seems that this vision is becoming a reality, and Powells speech at Jackson Hole will give him an opportunity to "walk the talk."On August 19th, ING Bank (INGB) predicted that the Reserve Bank of New Zealand (RBNZ) would cut interest rates by 25 basis points this week, in line with market expectations. The upcoming forecast for the new interest rate path is expected to fully reflect expectations of another 25 basis point cut to 2.75% in November. However, as the market has already fully priced in the terminal rate of 2.75%, even if the RBNZ confirms this path, it will not be interpreted as an unexpectedly dovish signal. ING Bank maintains its forecast of a 25 basis point rate cut in August and November, with the November cut marking the end of the current easing cycle.

U.S. debt rise by more than $30 trillion in 2020! What is the history of U.S. debt? Is it good or bad?

LEO

Oct 25, 2021 14:05

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Ｈistory

The United States has had national debt since its founding. It was proposed by Alexander Hamilton, the first U.S. Treasury Secretary, that in the first year the U.S. Congress passed the national debt, it raised 75 million in national debt.


In addition, the national government does not have the right to issue currency. If the government wants to obtain U.S. dollars, it must issue national debt with future taxes as collateral, and then use the national debt as collateral to the Federal Reserve to issue currency through the Federal Reserve.


War and financial crisis stimulated national debt

The first surge in the size of US Treasury bonds was during the Civil War. In 1860, the size of US Treasury bonds was only 65 million U.S. dollars. By 1863, it had exceeded 1 billion U.S. dollars. After the war, it further surged to 2.7 billion U.S. dollars, and then slowly and steadily increased. The second surge was World War II. The US Treasury debt soared from 51 billion US dollars in 1940 to 260 billion US dollars after the war.


The financial crisis is another starting point for the sharp rise of US Treasury bonds. In order to stimulate the US economy to get out of the crisis, the US government had to allocate trillions of dollars. As a result, the scale of Treasury bonds expanded sharply. On September 30, 2008, the US Treasury bonds exceeded 10 for the first time. Trillions of dollars. By May 2011, U.S. Treasury bonds reached the upper limit of US$14.29 trillion allowed by Congress. As of February 11, 2019, the size of U.S. Treasury bonds has exceeded $22 trillion.


The epidemic this year has also greatly stimulated the national debt. According to the US Treasury Department, since the beginning of 2020, the total US Treasury debt has increased by nearly US$3 trillion, exceeding US$26 trillion for the first time in history, setting a new record. Economic analysts predict that by the end of 2020, US Treasury bonds may rise by more than $30 trillion.


Long-term low yields drag down debt-holding companies

After the yield rate drops sharply, it will be difficult to return to the previous high. The current U.S. Treasury bond yields have not returned to the level before the central bank cut interest rates in the past two decades. Under the epidemic, the long-term low yield rate will put banks, pension funds and insurance companies in a difficult situation for overseas securities investment.


The huge US national debt not only affects the economies of other countries, but also casts a shadow on the prospects of the US economy. If the size of the US Treasury debt continues to expand significantly, and the US cannot take effective measures to ease the debt situation, it will cause the international community to worry about the dollar.


The worst-case scenario is that U.S. bond holders dumped large amounts of U.S. Treasury bonds in the financial market, leading to a substantial depreciation of the U.S. dollar and even triggering a dollar crisis. In the current situation where the global financial system is dominated by the US dollar, the US dollar crisis will cause global financial panic and stock market shocks, and endanger global finance.


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