Like, the profits can't keep coming if production doesn't keep coming. Can the government just borrow against future production and keep the ball rolling indefinitely, or is it going to come crashing down very soon?
Econ nerd pls help, my humanities degree did not prepare me to answer these questions.
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Econ major here.
When covid first hit and the US went into semi shutdown mode there was a massive drop in the market across almost all industries. The Dow Jones (a popular index of the market) lost almost a third of its value over the course of a month. This is when the fed starting pumping out massive amounts of $$ in the form of low interest rate loans to prop up the market and banks. They printed so much money that now 20% of all currency currently in circulation was printed in 2020
If the fed does not intervene in such a heavy handed way I think the market is headed towards a correction but with the current administrations close ties to capital/finance I wouldn’t be surprised if they pulled out some more fancy maneuvers.
Wow, really? Thats a lot of money. Is this causing inflation or has the fed found a way around it somehow?
I think the US gets away with it because it's the world reserve currency (for now), so there's enough demand for it that it doesn't affect its value too much