Summer doesn’t really feel like it’s arrived until the 4 July decorations come out.
Independence Day commemorates the Declaration of Independence of the United States from Britain in 1776; freedom to be in control of its own affairs and stand against unfair taxation – this year is the 244th anniversary and still the message stands true.
Traditionally it’s a day for barbeques, fireworks, for sharing time with old friends… joy at achieving freedom. It signifies the birth of a nation, a new country – hard won independence. As the country faces the biggest economic challenge since the Great Depression of 1929, people are yearning for reasons to celebrate more than ever before.
Racked by a contagious and, for some, a lethal disease; torn by racial divisions; more than 20 million jobs disappeared in March and April alone; an economy which has badly stumbled; the US has been slammed from several directions at once. People could be forgiven for wondering what there is to celebrate this 4 July.
And yet we all need to look up. The US has survived some terrible events – the Civil War, the First World, the 1918 influenza pandemic, the Great Depression, The Second World war… Vietnam. It will come through all this too. As the 19th century German philosopher Friedrich Nietzsche put it, “that which does not kill us makes us stronger”.
But the world has changed and will continue to evolve.
Some of these changes – mostly to do with the economy – will be painful. Consumer spending in real terms (i.e. adjusted for inflation) – which accounts for about 70% of the US economy – will drop this year by as much as 16.2% according to one forecast. People are likely to not just feel poorer, but will actually be poorer. Net household wealth could drop from $118 trillion in 2019 to $83 trillion this year, and drop by a further $11 trillion in 2021. It will start to recover in 2022 but only get back to 2019’s level by 2023. Of course these calculations cannot be anything more than estimates at this stage.
Governments around the world have stepped up to the plate and have adopted a variety of measures – cutting interest rates to the bone and increasing spending (see chart below). The total spent as of 12 May according to Reuters is an estimated $15 trillion, or about 17% of 2019’s $87 trillion global economy. This is likely to be just the start – that $15 trillion is likely to rise by the end of this year.
Will this global stimulus result in a resurgence of inflation, and a fall in the value of the US dollar? Opinions are mixed. One view is that “unemployment and deflation are the clear and present problems”. Stephen Roach, the highly-respected US economist and a Yale University professor, forecast in mid-June that the US dollar “is going to fall very, very sharply”.
That’s not very inspiring of joy.
But there is hope. Among the gloom there is a Glint of light – with a Glint account you can help protect your wealth by using the centuries-old form of money, physical gold. Use your Glint app to save, buy and soon, send gold, gold which is truly yours. It’s probably the greatest step to personal freedom you could ever take. So, on this 4 July, assert your liberty – use your Glint card.
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