Financial Crisis Expectations Intensify in the U.S.

Abstract

The article represents a consideration of various expectations and predictions erased during Trump’s presidentship, that a big financial crisis will occur soon and inevitable. Arguments of different authors about the reasons and size of the future crisis are discussed. Noteworthy is that expectations of a big crisis emerged at the background of dynamic growth of U.S. economy which occur in 2017-2018 years as a sudden event after long stagflation. In spite of long waited by many economists ordinary cyclical crisis after 8 years of weak situation since the last recession, American economy demonstrates dynamic growth, which Trump believes has occurred thanks to his economic policy. Among the most important reasons of the future crisis the big budget deficit and huge government debt are at the first place. This conviction is surprisingly wide proliferated, and even prominent economists and successful financial dealers estimate the growing government debt as the source of big danger for American economy. Looks strange, that the debt is not estimated as a financial asset for riskless savings of national and international investors. From this point of view the problem of budget deficits and government debt is rather a management problem than a source of danger. Special attention is attracted to the financial market which is overestimated, and represents really a big danger for economic and financial stability. The behavior of main indexes indicates that a big bubble was created at this market, and it can explode at any time. This is the most probable way the next crisis will occur, and this may be the main reason of the coming crisis. Now, according to the basic economic laws, the further economic growth lasts, the nearer is the next crisis. So, Trump Administration has to be ready for big challenges the future crisis will bring.