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US-China trade war may drive the economy to the brink of recession

September 4, 2019 Leave a Comment

The United States Treasury issues bonds to help pay for government projects. The longer the term – or life, in other words – of a Treasury bond, the greater the return you stand to make from investing in it.

For the first time in nearly two decades, the yield of a two-year Treasury note rose higher than the yield of a 10-year Treasury bill. This isn’t supposed to happen in a healthy economy. Two years after the last time this happened – it’s known as bond yield curve inversion in financial circles – the United States economy faced a recession. And not just any recession – the Great Recession!

The presence of this bond yield curve inversion is one of many economic indicators that experts and in-the-know, interested laypeople alike can turn to in determining whether a recession is looming on the horizon or not.

Other such economic indicators that aren’t a good sign of positive domestic economic performance in the short run include stifling gross domestic product growth, which is something that’s happened recently in the United States. Statistics from the first quarter of 2019 revealed a quarterly GDP of 3.1 percent, which fell to 2.1 percent in the second quarter. At least GDP is still positive, though the downtrend isn’t necessarily great for the welfare of the American economy. Also, the ongoing trade war between the U.S. and China isn’t doing any favors for the prospects of happy economic days in the next few months or years.

What Exactly Is Donald Trump Blaming for American Economic Difficulties?

Rather than scrambling to adjust economic policies, United States President Donald Trump is opting to place the blame on seemingly anybody and anything else out there.

Just last week, President Trump used Twitter to place the blame for the stagnating United States economy on “badly run and weak companies.” Trump went on to say – via his official, personal Twitter account, of course – that these businesses were doing poorly as a direct result of “bad management.”

In almost all cases throughout American history, presidents have never placed all of the blame for the currently poor economy on businesses, eschewing all responsibility on underperforming business entities based in the United States. Trump is one of the few to break this unspoken, unwritten code of conduct.

Who Else Is to Blame Other Than the Media?

Since Donald Trump began running for the role of president in 2015, he blamed various mainstream news media sources for being responsible for pumping out “fake news.” Via Twitter – what else? – about a month ago, President Trump shared that “Fake News Media is doing everything they can to crash the economy.”

While it’s true that some opponents of Trump want him to fail at all costs, even at their own demise, is it really fair to blame the media?

The Federal Reserve

A week ago, Trump turned to Twitter to complain that we have a “Fed problem,” not a “Tariff [sic] problem.”

The trade war isn’t doing any favors for the United States economy, and the Federal Reserve is full of highly-trained, deeply-experienced economists who know what they’re doing, after all.

Filed Under: Better Investing Tips, Feature, Traditional

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