There are more and more signals that the American economy is heading towards a recession. With the longest time of economic expansion we saw in modern history, it makes total sense.
Take into consideration that the real problems of the 2007/2008 financial collapse were not solved. So now we get a big recession. It is very unlikely that we will solve the problems with the next collapse.
One of the driving forces against the economic recession is consumer spending. The consumer spending is all the global economy has to trust upon.
When we look at the increase in consumer spending the tax cuts likely increased spending. But this effect is fading away.
Another thing we need to take into account is that Trump is inspirational for a portion of consumer spending.
But here comes the problem with the USA economy. It is all debt-fueled. So negative interest rates are what is needed to create a new boost. But the debts should be repaid once.
When this happens we will see a drastic economic slowdown. All the money that is spent on paying off debt and interest is money that can’t go into the economy.
Hopefully, will the next recession be used for getting the massive debt burden being paid off and the focus on sustainable economic production instead of consumption?