Why the United States may not be headed for a recession
Throughout history, it has been observed that danger often comes from unexpected sources. This principle was evident during the Bronze Age collapse, when the Hittite Empire fell due to the mysterious sea peoples rather than their powerful Egyptian rivals. The Sassanid Empire and Byzantium were also brought down by Arab tribes, and the Ottoman economy declined due to the sudden influx of New World gold.
In the present day, the U.S. economy may be shielded from a recession due to the focus on known factors that may lead to it. Despite fears of a crash when the FED raised interest rates, major indices such as the S&P 500 have continued to perform well. While some analysts attribute this to irresponsible fiscal policy, others believe it is a result of the lessons learned from previous struggles.
The U.S. national debt has reached staggering levels, but the Modern Monetary Theory and the dollar’s status as the world’s reserve currency provide some reassurance that it may not be a major issue. Reports of extensive selling of U.S. treasuries by countries like China have been disputed, and experts believe that fears of a multipolar world emerging are exaggerated.
However, despite efforts to account for standard recessionary dangers, there are still undetected risks that could pose a threat. The financial crisis may already be present in the form of unsustainable rises in the cost of living and the decline in private home ownership. These trends indicate that the foundation of the American economy has been compromised.
