Now Everything Depends on US Stimulus, from Billionaires to China’s Manufacturers, as US National Debt Blows Out

Now Everything Depends on US Stimulus, from Billionaires to China’s Manufacturers, as US National Debt Blows Out

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But consumers again paid down their credit cards; let’s be honest, that’s abuse of stimulus.

By Wolf Richter for WOLF STREET.

Who would have thought a few trillion dollars, channeled into the right pockets, could be such a big deal! Now everything depends on US stimulus: The stock market, the wealth of the wealthiest, and consumer spending – thereby not only the entire US economy but also imports from other countries, and thereby the economies of China and the rest of the world.

After yanking the rug out from under stimulus negotiations in Congress Tuesday afternoon, causing stocks to swoon, Trump today corrected his error and tried to push the rug back under the stimulus negotiations, and in addition promised voters a huge stimulus deal if they reelect him, while Biden is promising voters a huge stimulus deal if they elect him.

With all these trillions flying around, it’s hard to choose which trillions to go for. Meanwhile, the US national debt surpassed $27 trillion, hitting $27.05 trillion as of October 5:

Upon the news that Trump was trying to push the rug back under the stimulus talks in Congress, stocks related to retail spending soared today. Some examples:

  • Amazon [AMZN] +3.1%
  • Kohl’s [KSS] +5.9%
  • Ford [F] +3.6%
  • GM +4.0%
  • Harley [HOG] +3.0
  • Delta [DAL] +3.5%
  • American Airlines [AAL] +4.3%
  • Carnival [CCL] +5.3%
  • TJX [TJX] +3.1%
  • Abercrombie [ANF] +6.2%
  • GAP [GPS] +6.2%,

This bonanza today followed another billionaires-came-out-on-top report by UBS and PwC, cited by Reuters. The rally in stock prices since the stimulus and central-bank shenanigans kicked in globally pushed the wealth of just over 2,000 billionaires finally over the well-deserved $10 trillion mark, beating the previous record of $8.9 trillion at the end of 2019. Between April 7 and July 31, billionaires in the technology, healthcare, and industrial sectors saw their wealth (the many billions) increase by 36% to 44%. No billionaire’s billions left behind.

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Wolf Richter

In his cynical, tongue-in-cheek manner, he muses on WOLF STREET about economic, business, and financial issues, Wall Street shenanigans, complex entanglements, and other things, debacles, and opportunities that catch his eye in the US, Europe, Japan, and occasionally China. WOLF STREET is the successor to his first platform… TP-Title-7-small-200px …whose ghastly name he finally abandoned in July 2014. Here’s the story on that. Wolf lives in San Francisco. He has over twenty years of C-level operations experience, including turnarounds and a VC-funded startup. He earned his BA and MBA in Texas and his MA in Oklahoma, worked in both states for years, including a decade as General Manager and COO of a large Ford dealership and its subsidiaries. But one day, he quit and went to France for seven weeks to open himself up to new possibilities, which degenerated into a life-altering three-year journey across 100 countries on all continents, much of it overland. And it almost swallowed him up.