Prominent economist Gary Shilling has added to his cautionary tale on the economy, warning that the United States should be on the mend. economic decline he is great stock market to sell.
Shilling, president of A. Gary Shilling & Co., said the economic environment remains fragile, saying there is no significant support for the US economy, he said in a statement. interview by David Lin published on May 15.
According to a veteran economist, a weakened environment could lead to a major downturn that would affect stocks and many companies.
He described the current market as a “risk-off” environment despite the strong bullish sentiment among investors and speculators.
Shilling said that the outlook for the economy is finances markets have become more volatile, especially in business, as speculative activity continues.
“There’s not a lot of support for the US economy, and because of that, I think we’re going to have a big financial crisis and sell off in stocks. <...> This is a dangerous place. This is not a very popular belief at the moment because there are many investors and speculators who think things are going to the moon,” he said.
Lessons from the past
The economist also warned that much of what is happening today is similar to what has been seen in the past with bear markets and recessions.
He also referred to the amount of money flowing into the markets and the amount of money flowing into speculative assets as indicators of financial risk.
Shilling also said that the US economy has become dependent on spending by wealthy consumers.
The expert warned that if high-income households cut back on spending for any reason, economic activity could be severely weakened, adding to the economic crisis.
The warning comes at a time when the markets are volatile despite the lack of record highs.
For example, a The value of the S&P500 it recently peaked at around 7,500 before retreating amid market concerns over tensions between the United States and Iran, as well as growing fears of rising inflation.
