Consumer spending

Retail giant Walmart issued another profit warning last week. And the underlying reasons point to a stagnant US economy.

Walmart pointed to a change in the spending pattern of American consumers. As a result of the continuing rise in food prices, Americans have no money left for other purchases. In order to get rid of the increasing stock, Walmart has to lower its prices considerably, which results in lower profits.

“Inflation is currently above 10 per cent,” said Bill Ackman, founder and CEO of Pershing Square Capital Management. The billionaire investor fears that if inflation remains at this level, “there will be major consequences for most of us.”

With non-financial media writing about the increasing devaluation of money, inflation awareness is starting to permeate all parts of society. But according to Bill Ackman, the reality is much grimmer than it seems.

Rising house prices, records in the stock markets, extremely expensive bond markets and a new high for bitcoin have caused the total assets of American households to rise by an unprecedented 20 percent in one year. That is more than the total GDP of the United States, expected to reach $21.5 trillion this year.