Chen Kaifeng: US GDP growth is expected to reach 6% this year, and the government will control Bitcoin
Chen Kaifeng, chief economist at Huisheng Finance and professor at New York University, and CEO of Edoc Acquisition Corp, recently listed on NASDAQ, said in an exclusive interview with “Comparative” that the US economy will recover rapidly in the second half of the year.
Regarding the US economy under the pandemic, Chen Kaifeng believes that it is very likely that the 1.9 trillion economic stimulus plan announced by Biden will pass. Although the number of unemployed people in the US is still high, it is mainly due to the slump in the service sector. The current state of manufacturing and the overall economy in the US is actually very good. Driven by stimulus policies, the second half of the year should be overheated. With the COVID-19 pandemic subsides and the spread of vaccines, the US GDP can achieve a 6% growth rate this year, while the nominal GDP growth rate after considering inflation is likely to reach 8% or more.
Chen Kaifeng is also optimistic about the US stock market, which represents the trend of the US economy. He believes that although there may be a correction in the future, there is no problem in the overall direction. This year in particular, many high-quality new companies will enter the US stock market.
However, large-scale economic stimulus policies are bound to trigger inflation. Chen Kaifeng believes that, to a certain extent, this is an update of the US economy. Under the new economic situation, retired elderly people will face great pressure, and rent and medical outpatient expenses will become more and more expensive. Although interest rates will rise in the future, it will have little impact on young people.
The COVID-19 pandemic will cause the two major countries of China and the US to move on the opposite side of globalization and develop into endogenous economies. Chen Kaifeng told “Comparative” that the share of foreign trade in the two countries' economies will continue to decline, and enterprises will also pay more attention to the development of the local market. From a global perspective, countries will be less and less likely to divide their labor with each other, and each country will focus more on itself in the future.
Chen Kaifeng believes that the Biden administration is not fundamentally different from the previous Trump administration in terms of relations with China; however, the new administration is more systematic in formulating policies, and priorities in different fields may differ. China and the US will not completely decouple; they will continue to maintain a state where cooperation and competition coexist.
Many listed companies and Wall Street funds are aggressively buying Bitcoin as a “stored value asset” due to concerns about inflation and fiat currency depreciation caused by economic stimulus policies.
Chen Kaifeng believes that it is OK to invest some assets in Bitcoin to hedge, but the government may control this field.
He said that the recent decline in the price of Bitcoin was influenced by the newly appointed US Treasury Secretary Yellen. According to the “Comparative” report, Yellen has previously stated that Bitcoin is a tool for “money laundering.”
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