Growing fears of a financial collapse and social upheaval in the United States

Nick Beams  WSWS 

are increasing concerns in financial circles in the US and around the world that the accelerated rise in US stock market after the election of Donald Trump passing a big crash. These concerns reveal some of the forces behind the virtual civil war that lives the American political elite.

Brokers and Wall Street executives are increasingly of the view that "trade Trump" which sent the Dow Jones and other stock indexes to record highs, has come to an end, because the president has become a inconvenient. The highlight of entrepreneurial impetus passed by the conflict that followed the Nazi riots in Charlottesville. Trump's comments in defense of neo-Nazis were perceived as a debilitating burden for the international interests of US imperialism and a potential trigger for social and political instability within the country.

However, concerns about the instability that may cause the president reflect deeper fears. The US ruling class confronts problems that go beyond the current occupant of the White House. 

In a commentary published on Monday, Ray Dalio, president of the largest investment fund in the world, Bridgewater, said that politics " is likely to play a greater role than we have experienced before in a very similar way to 1937".America's ability to overcome political conflicts have a greater effect on the economy than the "classic monetary and fiscal policies".

The reference 1937 is significant. The first half of the year saw a major collapse in the US economy-a steeper than that of 1932 in the worst of the Great Depression decline. That year he also lived an eruption of class struggles in the automotive and steel industries. 

Dalio wrote that social and economic divisions in the US are similar to those of the revolutionary upheavals in this period. "During times like these, increasing conflict (both internal and external), emerge populisms, democracies are threats and wars can happen." Then he added that he can not predict how bad is the situation, but said he was not encouraged. "The conflicts have escalated to the point that a fight to death is more likely to reconciliation."

Almost 170 years ago, in his  Class Struggles in France , Marx noted that the eruption of the class struggle has a significant impact on the financial system because it puts confidence in the viability of the economic system presiding over the class in question ruler. 

In his commentary, Dalio wrote that when you look at the averages, "one could conclude that the US economy is fine, but when you look at the numbers behind these averages, it becomes clear that some are going extraordinarily well while other terribly wrong, with the largest gaps in wealth and income since the thirties ".

Dalio and others have referred to the widening social and political divide in terms of "populism", but his real fear is that an open conflict emerges between classes. "Most Americans," he said, "seem to be strong and uncompromisingly in disagreement as our leaders and the country's leadership." In addition, "they are more willing to fight for what they believe in trying to move beyond their differences to work productively based on shared principles".

In other words, illusions about the "American dream" and on the US as the "land of opportunity" which historically served as a kind of political glue, have vanished. What terrifies the ruling class is that the working class into action under conditions in which everything points to a bursting of the financial bubble that has been being inflated by global central banks since the financial crisis of 2008.

Nine years ago, the complete disintegration of the stock markets was prevented only by injecting trillions of dollars into the financial system overall-only the US Federal Reserve poured more than four trillion dollars. However, the main effect of these measures was not stimulate a significant recovery in the "real" economy seeing something obvious interest rates in the US and major economies remain at historically low- levels, but to facilitate a boom in the market financial.

The ultimate expression of this speculative mania has been the rise in the value of Bitcoin cryptocurrency. After more than 3000 days it took to reach the level of $ 2000, the currency used for Internet commerce, jumped from $ 2000 to $ 4000 in less than 85 days. Total market valuation of Bitcoins has expanded to $ 140 000 million, income of some major investors like Goldman Sachs. 

However, this is only one of the bubbles that have developed in almost all financial assets.

Downloading ultra -cheap money by the Federal Reserve and other central banks, companies were also able to maintain the high value of their shares through loans to buy back its own shares. However, this process is reaching a limit, as companies are overly indebted and can not acquire new loans to continue inflating the values of their actions. 

As the Financial Times said on Monday, taking into account its historical and long -term ratings, shares in EE. UU. "They seem more expensive than at any other time except in the months before the great collapse of 1929 and the bursting of the dotcom bubble in 2000".

They were under "normal" circumstances, the money was invested in bond markets to take advantage of their higher rates of return; However, bond markets now are in a bubble with a trade to record levels, with interest rates (which vary inversely to price) at record low levels. 

In 2008, the American ruling class responded to the financial crisis through political and economic mechanisms. On the one hand, they installed Obama as president, under proclamations of a "bold hope" and "change you can believe in " and with the support of the union bureaucracy and the various organizations of the privileged layers of the middle class, They hailed his election as a "transformative" moment.

On the other hand, they uncovered the treasure to inject more money into the financial system in economic history to finance an orgy of speculation and organize the largest transfer of wealth from the working class to the rich. Far from resolving the contradictions, they escalated to a higher level.

Although there are sections of the bourgeoisie who tremble at the intensification of class conflict, they can not propose any measures to address the conditions that are leading inexorably to social explosions. While Trump has pursued the policy of developing an extra-parliamentary right-wing movement, its critics within the ruling class are seeking to reorganize its administration to bring it under firmer control of the military and financial leadership of the country.

We are entering a new period of economic and social upheaval, for which you must prepare the working class by building a revolutionary leadership based on an internationalist and socialist program to resolve, in their own interests, the historic crisis of the profit system capitalist.

http://mamvas.blogspot.com/2017/08/crece-el-temor-de-un-desplome.html