What is the real state of the American Economy: Why has the Federal Reserve had to intervene several times during the passing week?

 

What is the real state of the American Economy? Why has the Federal Reserve had to intervene several times during the passing week?

The Federal Government depends on selling bonds in order to borrow considerable amounts of money and two trillion US Dollars - planned borrowing for 2026 - is an awful amount of money, even by US standards. When investors are only willing to buy bonds are increasingly hight rates or not willing to invest at all in US bonds, this is sure sign of trouble for the US Dollar. Things appear shaky, to say the least, and we are not talking about freezing payments for the Federal Budget. Recently, the US administration was in a prolonged lockdown until, somehow, agreement was reached between the White House and Congress. But what is happennig right now is about a lot more than that. 

Internationally, the US Dollar has been used as measure of value and as a way to store wealth. In most cases, if you want to buy energy (fossil fuels), the US Dollar is the currency reference. Despite the fact that with regards to other currencies - ie the Pound or the EURO - the value of the US Dollar has remained relatively unchanged, the US Dollar has lost support and foreign banks are now reluctant to invest in American National Debt. If the USA can only sell bonds at ever higher rates and/or investors are no longer willing to lend any monies, then any additional printing of monies will certainly throw the USA over the edge. If the worst happens before the November 2026 Mid-Term Elections this would mean that the present Administration has only a few months left and that the next administration will be left with an absolute nightmare.

This could well explain why the present Administration has turned out to be such an aggressive Administration when financial breakdown is no longer a possibility but a certainty in the very short term.