Despite initial jobless claims going back up from last week’s figures, the S&P 500 closed at an all-time high, north of 4,000 points. This has been the common theme throughout 2020 and into 2021 and that is jobless claims continue to remain at levels above those seen during the depths of the GFC, but nevertheless, equity markets make new all-time highs. It truly is the tale of two economies.
Initial jobless claims for the week ending 27 March came in at 719,000. Last week’s figures were revised downward by 26,000 to now stand at 658,000. In aggregate, amongst all unemployment insurance programs, some 18.2 million Americans continue to file claims. This takes the de facto unemployment rate to 12.8 percent, which is more than double the official rate of 6.2 percent. The official jobs report for March will be released tomorrow by the BLS.
The Federal Reserve’s balance sheet currently stands at $7.69 trillion, which is a week-over-week decline of around $30 billion. However, the Fed remains committed to its policy of QE, and will continue to purchase at least $120 billion worth of Treasuries and mortgage-backed securities on a monthly basis. This will take the balance sheet to north of $8.5 trillion by year end, and if Congress should pass more spending and/or the economy or markets decline to a certain level, then the balance sheet could easily approach $10 trillion!
In attempt to mitigate the effects of a dollar doom-loop, something The Kapital News has been describing over the past year, the US Treasury is perhaps going to be sending $650 billion to the International Monetary Fund, IMF. The purpose would be to assist poor and middle-income countries with their debt burdens. Despite the mammoth figure of $650 billion, Treasury actually does not even have to go to Congress for approval! Talk about checks and balances. This is almost the same size as the Troubled Asset Relief Program, TARP, which was passed during the GFC to help stop the GFC! Now, this much American taxpayer money may be going out the door as early as August if the IMF and others approve. Developing and poorer nations are facing the perfect storm of economic, political, and social issues. Whether it be runaway inflation, supply chain disruptions, coups, protests, or riots, or government corruption taken to its limit, these countries are in dire straits. Their stress can easily turn into global stress. The officials at the Treasury, IMF, and other agencies understand this situation. And while it does not justify giving away US taxpayer money, that is likely going to be what happens. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Debt #Inflation #FoodPrices #IMF #USA #Liberty #EndTheFed #bananarepublic #FireCongress #Leadership #Bailouts #Protests