09:34 GMT26 May 2020
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    Last week, US President Barack Obama, US Vice President Joe Biden and Chairman of the US Federal Reserve Janet Yellen held a secret meeting at the White House, during which they discussed the US and global economy, an official statement released by the White House said.

    However, according to former US politician and political expert Ron Paul, the subject discussed behind closed doors could be much more serious than it might seem.

    The meeting at the White House was followed by an emergency secret meeting of the Federal Reserve Board and another non-official meeting devoted to bank reform, strengthening of the US financial system and consumer protection.

    "[…] the real reason for all these secret meetings could be a panic that the Fed's eight year explosion of money creation has not just failed to revive the economy, but is about to cause another major market meltdown," Ron Paul wrote in an article published by the Ron Paul Institute for Peace and Prosperity.

    The fact that both the US President and US Vice President were present at the meeting with the Fed chief made Washington experts assume serious banking problems and economic failure, geolitico.de wrote.

    According to superstation95.com, "in the history of the United States, it has never before taken place that both the President AND Vice President meet ‘unexpectedly' with the Federal Reserve."

    Last week, several US economists reduced their tracking estimates for growth in the first-quarter GDP to near zero, after a 1.4 percent gain in the last quarter of 2015, Bloomberg News noted. The estimated figures mean that the country is "dangerously close to the official definition of recession," Paul mentioned.

    If the Fed continues its policy of gradual rate hikes, it could lead to further economic problems and result in a bursting of another loan bubble.

    "Higher interest rates will hurt the millions of Americans struggling with student loan, credit card, and other forms of debt," Paul wrote.

    According to him, about 40 percent of US residents who have student loan debt have not been able to fully repay it in time.

    "If Federal Reserve policies increase the burden of student loan debt, the number of defaults will dramatically increase leading to a bursting of the student loan bubble," the expert continued.

    Moreover, the increase in interest rates would also make it more difficult for the US authorities to deal with the country's foreign debt.

    "Increased costs of debt financing will place increased burden on the American people and could be the last straw that finally pushes the federal government into a Greek-style financial crisis," he concluded.


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