When it comes to today’s title, if having to choose, then The Kapital News would side with economic warfare. Of course we’re discussing the rising tension between the US and China. Today, China passed legislation that pertained to Hong Kong where many say it is a power grab by China to take away the autonomy of Hong Kong. Just yesterday, the United States, through Secretary of State, Mike Pompeo, announced that the US does not recognize the autonomy of Hong Kong. This was major news in itself. However, President Trump had made comments prior to the passing of the Chinese legislation, threatening China that if they should pass this bill that the United States would act in kind with strong force. Well now, the line has been crossed and the next move goes to the President – he is expected to announce his decision tomorrow, 29 May, as to how the US will respond. This is a major geopolitical event with many possible outcomes – many of which could take years to play out. Should this escalate further and quickly, the fallout could cause major ripple effects throughout the global economy that is already reeling from the effects of COVID-19, too much debt, and other flawed policies. Pay attention to these developments.
On the domestic economic front, the 2nd revision for Q1 GDP came in at -5% from an initial reading of -4.8%. The major decline in economic output is expected to severely effect Q2, where many forecasts are below -40%! This would be the worst reading since the Great Depression. On the jobless front, an additional 2.1 million Americans filed for unemployment insurance for the prior week, taking the 10-week total to around 41 million Americans – truly devastating. With respect to continuing jobless claims, this data point ticked down to 21 million. This is not surprising since the economy is “re-opening” and thus employees are being called back to work. Further, the PPP loans may also be having an effect since a condition to making these loans forgivable is for employers to bring their employees back on the payroll. And lastly, the President is having a war of words with social media giants, Facebook and Twitter. These developments are also worth paying close attention to as these media platforms play a major role in today’s society. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #USA #China #HongKong #Depression #Gold #Bailouts #Debt #Jobs