In order to solve the economic problems caused by the new crown epidemic, Joe Biden announced on Thursday 1.9 trillionUSDNew stimulus plan. A hedge fund warned that large-scale spending may repeat the situation before the Wall Street stock crash in 1929, causing inflation to rise, and eventually threatening to detonate an epic stock market bubble.
David Neuhauser, founder of the hedge fund, said that the Biden stimulus plan seems to hope that people will return to work to reproduce the “Roaring 20’s”, but it must be noted that the successor to that glorious period is Wall Street. The stock market crash and the Great Depression.
He worried that the spending plan might create a financial environment similar to that before the stock market crash in 1929.
Neuhauser stated that this amount exceeds 1 trillionUSDThe huge expenditures of the company are caused by the epidemic that has raged in the past 9 months. The goal is of course to obtain vaccines and overcome the epidemic. However, he believes that we still cannot be completely sure about how long it will take to overcome the epidemic and what the future global growth prospects are.
Neuhauser said: “The market is trying to figure out what kind of narrative they should adopt. In the past 9 months, the stock market has almost maintained an upward trend. I think we will start to see inflationary factors generate, which will eventually lead to epic bubbles.”
Biden announced on Thursday that the scale reached 1.9 trillionUSD“American rescue plan” (American rescue plan), containing 1 trillionUSDFamily relief, 415 billionUSDEpidemic prevention funds, and provide about 440 billion yuan for small and medium-sized enterprisesUSDsupport.
Neuhauser believes that although the US gross domestic product (GDP) growth is expected to reach 6% this year, he said that the US economic growth will return to normalization in the next few years, growing at a rate of 2% to 3%. Under the influence of globalization and the huge government deficit, the road to recovery may still be difficult.
–
