US stocks have made huge losses after a major sell-off last Friday on Wall Street. By Monday, the Dow Jones Industrial Average lost nearly 2.8%, 900 points, while the S&P 500 dropped 3.9% and the tech-heavy Nasdaq Composite 4.7%.
Markets continued to take a big hit after the US Labour Department reported that inflation ‘unexpectedly returned’ to record highs last month, spiking at 8.6% compared to a year ago, and adding to the prospect of a slump.
Investors are now nervously looking ahead to the US Federal Reserve’s upcoming policy meeting later this week, with expectations that the central bank will raise interest rates by at least a half-percentage point – if not more – to combat surging consumer prices.
The cryptocurrency market saw a huge sell off on Monday, with the price of Bitcoin plunging to its lowest point in nearly two years, falling below $24,000 as investors dumped risky assets amid rising rates.
The wipeout plunged the total ‘value’ of crypto assets below $1 trillion (£822bn) down from more than $3 trillion last November.
‘The brief window of hope that opened in the back half of May, as it looked like US inflation/Fed tightening forecasts were hitting a peak and China was reopening has snapped violently shut,’ says Vital Knowledge founder Adam Crisafulli, with investors now ‘back to wallowing in a hole of despair following the huge CPI on Friday.’
The majority of last week’s losses came on Friday after hotter-than-expected inflation data saw the Dow Jones index plunging nearly 900 points in one day.
The Daily Telegraph echoed the growing bourgeois despair at the developing world crisis when it stated in a headline yesterday that Bank of England governor ‘Bailey has a choice between brutal recession or runaway inflation’.
The Telegraph article went on: ‘Andrew Bailey and Jerome Powell will therefore be figuring out how to deliver the message: “Things are bad and likely to get worse, but buckle up because we’re going to raise rates anyway.”
‘It’s extraordinary … This means that we are now slap bang in the worst of all worlds. Bailey and the other Bank rate setters are facing a choice of the lesser of two evils: a brutal recession or runaway inflation. And if they misstep we could well end up getting both.’.
The article continues: ‘Nor can the Old Lady of Threadneedle Street expect Number 10 to put a shoulder to the wheel … But if anything, politics is making matters worse. The Treasury has helped households deal with higher energy bills but companies have been left to fend for themselves.’
In the face of the gigantic but still developing crisis of the capitalist system, the working class is already rejecting ‘a choice between brutal recession or runaway inflation’. The hundreds of strike actions that are taking place to drive up wages to keep pace with price increases is testament to the determination of the working class on this score.
The working class will not be returned to the 1930s with its starvation of the working class and its hunger marches.
This Saturday, many thousands of trade unionists will be marching in London against the Tory government and its policies. Immediately following the march there will be a series of very powerful rail strikes.
The TUC is meeting in Blackpool tonight to discuss the march and its demands. At the moment, the aims of the march are limited to a ‘real pay rise’ for every worker – this is in a situation where price inflation is running riot.
It is now obvious to all that we are living through the greatest crisis of the capitalist system ever. The TUC must provide real leadership in this situation.
It must declare that Saturday June 18th will be the first day of an indefinite general strike to bring down the Tory government and bring in a workers’ government and a socialist nationalised and planned economy.
This is the only way forward.
The calling of a general strike will inspire the working people of the world to push forward to smash the ailing and out-of-date capitalist system and replace it with the worldwide socialist republic.
Capitalism must be consigned to the ‘dustbin of history’. There is not a moment to lose. Join the WRP today. Forward to the British socialist revolution!