Over the past couple of years, we've been saying that a massive storm would hit the U.S. in the near future. However, it now appears that this storm is arriving sooner than we had expected.
Let's take a look at two figures: the U.S. just announced its first quarter real GDP, which saw a year-on-year decrease of -0.5%, a drop greater than the projected -0.2%. 、
There are two particular data points worth noting: one is the significant downward revision of personal consumption expenditures to a mere 0.5% increase, marking the weakest quarterly performance since the outbreak of the COVID-19 pandemic.
Meanwhile, the U.S. core PCE price index was revised upward to 3.5%.
What do these two figures together imply?
The substantial downward revision of personal consumption expenditures can be attributed to two reasons: a 2.8% decrease in the real value added by the private goods-producing sector and a 0.3% decline in the private services-producing sector.
This indicates that the distribution of resources in the U.S. is becoming increasingly problematic, leading to the decline of the private sector.
However, at the same time, the real value added by the government sector increased by 2.0%.
This suggests that government consumption is expanding on a large scale.
The -0.5% year-on-year growth of the U.S. economy, the negative growth in both goods and services for the private sector, and the substantial increase in government consumption - these three figures reveal the true face of the U.S. economy.
What kind of face is it?
Consider this statistic: the proportion of the current U.S. labor force that has to work multiple jobs just to make ends meet has reached the level seen during the 2008 financial crisis.
This figure is quite alarming, as it signifies that there is a severe problem with the distribution of wealth in the U.S.
In fact, this issue has been around for some time.
The U.S. has a per capita GDP of over 80,000 dollars, yet the average after-tax monthly income of its ordinary population is only about 2,000 dollars, which is not much different from that of the Japanese, who have a per capita GDP of 34,000 dollars!
To be honest, even in China, there are many families of three with an after-tax monthly income of over 10,000 dollars.
Moreover, considering that the prices in the U.S. are several times higher than those in China, and taking into account the poor social security and infrastructure in the U.S., we can see that the living standards of ordinary Americans are probably not as high as those of families in our country with an after-tax monthly income of 8,000 to 9,000 dollars.
This has been reflected before: on the surface, the U.S. economy appears to be booming, but car sales are declining, with annual sales now falling to the level of the 1970s, around 15 million vehicles, less than half of ours. As for the main staple grains consumed by Americans, wheat production is only a little over 40 million tons, and rice is even less, at only 5 million tons. In contrast, the combined total of these two crops in China is nearly 350 million tons.
The U.S. grain production is just a little over one-seventh of China's, while its population is a little less than one-third of China's. This data is quite strange. Why is that?
There is another figure to consider: although the consumption and income of the lower-class Americans are not doing well, the top 10% of Americans are doing increasingly better, with their share of consumption rising.
Where does their money come from?
From this slogan: reshoring of manufacturing. Both Trump and Biden have been working on this, albeit with different approaches. When Biden was in office, he used industrial policies. That is, if you invest in a certain industry, I will give you money. He introduced a number of bills, such as the infrastructure bill. The most typical example is the charging station fiasco: Biden said he wanted to vigorously develop new energy vehicles, so he focused on infrastructure first, planning to build a large number of charging stations. As a result, after spending 36 billion dollars, only 58 charging stations were built in three years. Not only was the efficiency extremely slow, like a snail crawling, but the corruption behind it was also shocking. After Trump took office, he was much more direct than Biden: even before he took office, he himself made a lot of money by issuing currency, amounting to billions of dollars, and his wife and children followed suit. At the same time, he created various incidents, causing the U.S. market to fluctuate wildly, with a group of insider traders following him and making a fortune. For example, when he recently bombed Iran, the international oil prices soared immediately. It would be hard to believe that there were no insider dealings behind it.
Meanwhile, he also used the Secretary of the Treasury as a tool to cut various subsidies for the poor in the U.S., such as medical insurance and education. In short, he cut almost everything that could be cut. So, although the two are political rivals and enemies, they are absolutely on the same side when it comes to exploiting the lower class and enriching that top 10%!
The only difference is between a hypocrite and a true villain.
Speaking of which, everyone now understands why, despite the negative growth of the U.S. economy, the Secretary of the Treasury still boasts about cutting U.S. government spending on a large scale, but the government spending in the first quarter still increased by 2%!
The money all went into the pockets of that top 10%, only Trump was more ruthless this time. Biden still allowed the lower class to share a little bit of the benefits, while Trump, under the pretext of corruption in Biden's process of distributing money to the lower class, not only gave nothing to the lower class, but also took away what little they originally had!
Is that the end of the story?
No! Everyone must not forget: the U.S. has the powerful magic of statistical data revision! What if this -0.5% is also fake, and it will be revised after the news period is over? That would be a real problem! There is no way around it, as the U.S. has been suffering since its financial war in 2022 failed. Such a war is supposed to be a situation where you kill a thousand enemies and lose eight hundred of your own, but still make a profit of two hundred. However, this time the U.S. only suffered losses without making any profit. Isn't the economy more severely damaged? No wonder that after Trump took office, the Federal Reserve Chairman Powell was reluctant to do anything. He probably already knew in his heart that the more he did, the more mistakes he would make. The less he did, the fewer mistakes he would make. If he did nothing, there would be no mistakes!
As for this matter, how should we put it?
The superstorm in the U.S. this time may be more violent and arrive faster than we had anticipated!
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