Cool materials –fiscal cliff
Chicago Board of Trade (CBOT) soybean futures ended lower on Thursday suspended for two days in a row of gains. Investors offset long positions due to “financial cliff” worries and good weather conditions inSouth America. Agricultural market price and theU.S.stock market all fell, the financial investors worried that cliff would not be resolved, theU.S.economy may be in recession.
The term “financial cliff” , was first proposed by Federal Reserve Chairman Ben Bernanke at a congressional hearing in February 2012 .It refers to the series of increasing income and reducing expenses fiscal policy will fail at the same time ,January 1, 2013, according to the current law in theUnited States. Once these policies are triggered to occur, the United States 2013 federal austerity will reach about 600 billion U.S. dollars, accounting for 4% of GDP. This huge fiscal tightening may directly pushing theU.S.economy down tor cliff recession.Fiscal policy mainly refers to the 2001 to 2003 tax cuts, the alternative minimum tax rate (AMT), wage tax credits, automatic spending cuts mechanisms, emergency unemployment relief bill, the Affordable Care Act (Affordable Care Act, ACA)
The ” financial cliff cause a direct recession of the U.S. economy,as well as,financial cliff ” cause a negative spillover effect,which will spread to the United States at the same time and international market.Firstly, the “financial cliff” caused uncertainty which depressing market confidence, suppressing corporate capital spending and private consumption. Finally, the negative impact of the “financial cliff” to the U.S. economy transfer to the other countries through trade, financial markets and other channels.
It is predicted a recession in future markets.