Xinhua recently published three consecutive commentaries warning about the “American risks,” especially the risks that Wall Street poses. The first commentary is titled “Is Wall Street Brewing a New Crisis?” The article warned that the whole landscape of economic optimism, the appreciating dollar, and a rapidly growing stock market, seems to be déjà vu all over again, just like the days before the last global crisis. People should not underestimate Wall Street’s greed. The second commentary pin-pointed the question, “Will Deregulation Trigger a New Crisis?” The commentator suggested that, since President Trump promised deregulation of the financial market along with plans for a tax cut and major infrastructure investments, Wall Street has been enjoying a “rave party.” The combined stimulation package could increase the risks to a dangerous level. The third commentary asked, “Why Are the Wounds from the Previous Crisis So Difficult to Heal?” The author quoted the International Monetary Fund (IMF) which stated that the advanced economies responded to the earlier Crisis with public financial stimulation like the Quantitative Easing (QE) policies. These policies introduced high debt, low investment and a fragile financial industry across the globe. The structure of the U.S. financial system originally caused a lack of investment and consumer spending and slowed the recovery from the previous crisis.
Source: Xinhua, February 15, 2017