U.S. Bankruptcy: Thousands of Millionaires Flee Instantly
During the week ending September 22nd, both onshore and offshore RMB exchange rates against the US dollar rose by 0.81%, surging close to the 7.0 threshold.
Even on September 20th, when the US dollar index rebounded, the RMB remained strong, continuing a major counteroffensive with unstoppable momentum, reaching the highest points of 7.0425 and 7.0378 respectively, both setting 16-month highs.
We have noticed that the RMB's appreciation this week is more than double the US dollar's depreciation (down 0.35%), and even stronger than the euro, indicating that the RMB is making a comeback and may break through the 7.0 threshold, which will become even clearer under the expectation that the Fed will surrender to the market and start a significant interest rate cut to initiate a monetary easing cycle.
On September 19th, the Fed unexpectedly announced an emergency interest rate cut of 50 basis points, pressing the "flood beast" printing press, sending the latest harvest cycle signal, preparing to defend the job market and avoid economic recession, or even bankruptcy, not fearing the US election year's significant interest rate cuts, officially showing its cards, and sending a signal of war.
This move shocked Wall Street and most economists, and Trump even criticized the Fed's interest rate cuts as politically motivated, while Harris praised the Fed, indicating that the US authorities have won the battle against inflation and started a loose cycle, while Trump had been warning that interest rate cuts before November would be seen as the Fed's counteraction against him to stimulate the economy before the vote.
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Subsequently, on September 21st, Fed Governor Waller suddenly said in an interview with the media, "The Fed may consider cutting interest rates by another 50 basis points this year," indicating that after the Fed's significant interest rate cut, the expectation of another 50 basis point cut has increased, shocking Wall Street, and the Fed's panic interest rate cut expectation implies that the US economy is facing a recession, and even the worst moment of bankruptcy is about to come.
We have noticed that Waller's interview with the media was not on the Fed's financial agenda, which seems to be a surprise rescue operation by the Fed, because currently, the optimistic sentiment brought to the US financial market and the economy by the Fed's interest rate cuts has been almost completely digested, and even the expectation of another significant interest rate cut of 50 basis points in November or December has been digested by 60%.
This indicates that the Fed's announcement to the market in advance that it may cut interest rates by another 50 basis points is intended to stabilize market expectations, because the market does not like uncertainty, but the rapidly changing inflation dynamics in the US are creating this uncertainty, and the Fed's interest rate cut decisions in the next few months will highly depend on the performance of economic data, which is the most dangerous time.
The Fed's decision has raised serious doubts about the stability of the US economy, and Fed Governor Bowman has opposed it.
The magnitude of this interest rate cut is in stark contrast to the remarks of the Fed's board members before the meeting, which not only indicates a readjustment of monetary policy but also indicates that the Fed is afraid, and the Fed's significant interest rate cut may be counterproductive, and Wall Street may need to prepare for the next fierce storm.
Superimposed on the Japanese authorities' more than ten years of negative interest rate era, the arbitrage transactions of 20 trillion US dollars using the interest rate difference between the yen and the US dollar in the US market have not ended.
As the arbitrage transactions continue to expand and the Bank of Japan raises interest rates, it will cause tens of trillions of US and European funds to withdraw, continuing to form a flood beast-like tidal harvest effect on the US financial market, making the US financial market continue to experience a major liquidation.
This has made Wall Street continue to bet that the probability of a 25 basis point interest rate cut in November this year and a one-time interest rate cut of 50 basis points or more at the December interest rate meeting will exceed 60%, and the focus will turn to the next employment and inflation data reports to determine the pace of the Fed's interest rate cuts.
Next week will include reports on manufacturing, consumer confidence, durable goods, and personal consumption expenditure price index (a key inflation indicator), and economists expect the Fed's favored inflation indicator, the August PCE inflation increase, to rebound to 2.70%.
In this regard, American senior economist Tyler Denden warned that the US economy is now like the end of the 1920s, and some hard indicators reflecting the US economic physique have shown that the US economy is in a recession, and the US economy is developing according to the script of bankruptcy, and this recession cannot be stopped by a few interest rate cuts by the Fed.
"Debt King" Glarke also believes that "the US has already fallen into a recession, and the Fed's significant interest rate cuts cannot stop this situation from happening," and "the degree of lagging behind the growth curve is the same as the degree of lagging behind the inflation curve two years ago," which has sounded the alarm in the US stock market and various employment departments in the US, and when the two-year and ten-year US Treasury yield curve suddenly ended the inversion and turned positive two weeks ago, it clearly sent a signal to the Fed that the US is in a recession.
Former US Commerce Secretary Wilbur Ross also said on September 15th that "the US economy is in a mild recession, and the recession may come regardless of whether the Fed is willing or not," and the current chaotic US election may also be becoming another fuse for the upcoming US economic recession.
One survey after another shows that most Americans believe that the economy is on the wrong track, and large US companies are also declaring bankruptcy at an astonishing speed.
S&P Global Market's report updated on September 22nd shows that in the first eight months of this year, the number of US bankruptcy applications has surged to a terrifying level, reaching 452, the highest level since the epidemic and the second-highest level in 15 years.
Subsequently, JPMorgan Chase CEO Jamie Dimon even warned at the New York Institutional Investor Committee that "the fate of the US economy will be far worse than a recession," entering a state of declining economic growth, while inflation and unemployment rates begin to accelerate, similar to the United States in the 1970s, and now every week there are large banks continuing to close more branches, which is the early performance.
This has been confirmed by the news that Wall Street big shots such as Buffett, Drucker, Tapper, and Soros are still leading and starting to sell off US stocks in a clear-out style after the Fed's interest rate cut, making cash hit a historical high.
The development of these events has awakened Fed Chairman Powell, and with the surge in net interest expenditure of US Treasury bonds under high interest rates in the past two years, the US should not make multiple significant interest rate cuts, and it is expected that it will not be able to hold on until January 2025 when the US debt ceiling is lifted, but Congress seems to be unprepared or unwilling to negotiate on how to raise the debt ceiling.
On September 9th, American billionaire Musk once again warned of the dangerous trajectory of the US debt economy and federal spending, saying that "the US is on the fast track to bankruptcy."
According to the latest views of American Wall Street financial shark Jim Rogers, who recently accepted media interviews in Singapore, "the US is the world's largest debtor, printing and debt are everywhere, and it will eventually pay the price."
At this critical moment, another unexpected event has occurred in the US dollar stronghold that has made Wall Street traders feel surprised.
According to the report data published by the US Internal Revenue Service on September 22nd, in recent months, thousands of millionaires in Chicago, the largest city in Illinois, are fleeing in record numbers, and these rich people are basically heading to Florida, Arizona, and other states.
The US financial research institution ZeroHedge reported on September 22nd that the Illinois Policy Institute has reported a continuous decline in population for ten consecutive years.
Surveys of the rich who left the state show that the main reasons for Illinois residents to leave the state are better housing, job opportunities, and lower taxes, while the poor public debt crisis in Illinois has made these two worse.
The report specifically mentioned that in addition to Illinois, New York, California, Massachusetts, and New Jersey are also the four states with the largest loss of rich people in the US.
Of the 75 largest cities in the US, 53 are currently facing huge fiscal deficits and are drowning in debt.
For example, if New York City allocates these debt deficits to all taxpayers, it will increase the debt of each New Yorker by $56,000.
This has also led to more and more American millionaires continuously withdrawing from some states or cities in the US that may go bankrupt in debt.
In addition, the phenomenon of rich people fleeing in states with high taxes and high debt such as West Virginia, Louisiana, Hawaii, Mississippi, Alaska, Connecticut, and Wyoming is also very obvious.
These cities even include big cities like Washington, San Francisco, and California, and Illinois is just the beginning.
It is obvious that the phenomenon of thousands of American millionaires leaving instantly seems to be revealing that the US economy is going bankrupt, and the US cover-up will be officially lifted.
At this time, the Fed has to gamble on all its credibility to start an unexpected monetary easing cycle and panic interest rate cuts, which will make the expectation of the US "debt bubble and inflation risk" coming back more clear.
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