America on borrowed time
"Economic recovery will not be linear as the world continues to grapple with the uncertainty of the pandemic.
Why it matters: Despite being propped up by an extraordinary amount of fiscal stimulus and support from central banks, the state of the global economy remains fragile.
Warning signs about that fragility are flashing, as Dion Rabouin writes in his Axios Markets newsletter:
- World Bank president warns of potential defaults by countries that are over-leveraged.
- Goldman Sachs CEO warns of stock market being inflated and detached from reality.
- Lowest bankruptcy filings since 1986, thanks to the government printing money to save the economy from another Great Depression.
- Treasury yield rises above 1% overnight.
- Consumer confidence increases due to government stimulus checks.
The bottom line:
America’s economy is operating under the influence of performance-enhancing steroids thanks to unprecedented monetary intervention
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