Stimulus Spending

3 Things: Exuberance, Small Caps, & 6% Realities

"...there is a long way to go between President-elect taking office, drafting bills and getting them passed. There is even a further period of time before any actions actually passed by the Trump administration actually create perceivable effects within the broader economy. In the meantime, there are many concerns, from a technical perspective, that must be recognized within the current market environment."

Ron Paul Tells Trump: "To Really 'Make America Great Again', End The Fed!"

Former Dallas Federal Reserve Bank President Richard Fisher recently gave a speech identifying the Federal Reserve’s easy money/low interest rate policies as a source of the public anger that propelled Donald Trump into the White House. Mr. Fisher is certainly correct that the Fed’s policies have “skewered” the middle class. However, the problem is not specific Fed policies, but the very system of fiat currency managed by a secretive central bank.

Trump, OPEC, & Game Theory

The role of the USA has changed sharply in terms of its likely behaviour under a Trump administration as it will no longer be a cooperative player, but a competitive one, where there are drastically different equilibrium conditions. When the dominant player changes its tack to claw back some the shared gains for itself, the game can rapidly change to a zero-sum or even negative-sum one.

Infrastructure Spending Does Not "Grow The Economy"

In simple terms that even Donald Trump and Paul Krugman can understand: there is no such thing as the Infrastructure Fairy that takes government spending and magically turns it into economic growth.

Total State Or Total Freedom: The 8 Marks Of Fascist Policy

It is ever more widely known that statism does not and cannot work. Statism is the great lie. Statism gives us the exact opposite of its promise. It promised security, prosperity, and peace; it has given us fear, poverty, war, and death. If we want a future, it is one that we have to build ourselves. The fascist state will not give it to us. On the contrary, it stands in the way. In the end, this is the choice we face: the total state or total freedom. Which will we choose?

Why Paul Krugman Should Go Back To 5th Grade

Economist Paul Krugman is whining for more fiscal stimulus, his favorite pastime by far. Krugman’s target this time is Japan... "The average 5th grader understands it’s absurd to pay money for something guaranteed to be useless, but the average Keynesian economist doesn’t."

Fourth Turning: Crisis Of Trust, Part 1

We're beginning to believe the nation will not be unified behind a common cause when the coming financial eruption unleashes molten lava of chaos, punishing economic distress, civil strife, class warfare, race wars, and ultimately global war. As Strauss and Howe foretold, the establishment (aka corporate fascist military industrial surveillance state) has seen a sequential loss of popular trust as their blatant corruption, sociopathic stranglehold on the levers of power, and unrelenting greed have angered the critical thinking aware citizens of this country. The next leg down in this Greater Depression will sever the remaining trust, disintegrating any remaining support for the existing civic order. What comes next will be heavily dependent upon whether the 5% to 10% of liberty minded believers in the Constitution are able to gain the trust of the masses.

Frontrunning: September 4

  • Jobs Report Could Seal the Deal on Rates (WSJ)
  • The Jobs Report and the August Curse: Jobs Day Guide (BBG)
  • Migrants hold out on Hungarian 'freedom train'; Orban says millions coming (Reuters)
  • Migrant Crisis Divides Europe (WSJ)
  • German industry orders fall in July on weak foreign demand (Reuters)
  • Alibaba’s Jack Ma, Joe Tsai to Borrow $2 Billion Against Shares (WSJ)
  • U.K. Retailers Post Worst Sales Decline Since Financial Crisis (BBG)

Hilsenrath Warns Fed Is Out Of Ammo, "Policy Makers Resorting To Backup, Backup Plans"

As the U.S. economic expansion ages and clouds gather overseas, policy makers worry about recession. But, as WSJ's Jon Hilsenrath warns, their concern isn’t that a downturn is imminent but whether they will have firepower to fight back when one does arrive. "The world economy is like an ocean liner without lifeboats,” economists at HSBC Bank explained, and as looming threats are a reminder that the slow-growing global economy is just a shock away from peril, with rates already at zero, Douglas Elmendorf, the recently departed director of the CBO, warned, "policy makers are thinking about their backup, backup plans."

About That Japanese Downgrade

While we no longer live in a world in which debt matters - because central banks will just monetize it in their ongoing and no longer covert effort to reflate the final bubble - and thus debt ratings are an irrelevant anachronism from a bygone era, we can't help but recall a certain statement by S&P from September of last year, in which the rating agency reminded everyone just why Japan has to proceed with both its first sales tax hike from 5% to 8%, (which, together with weather, has now been blamed on Japan's shocking quadruple-dip recession), but also the follow up from 8% to 10%, which as we now know, has been delayed indefinitely, and which was supposed to prefund welfare spending for Japan's demographic disaster which with every passing day gets closer and closer.

Marching In The Wrong Direction

We cannot possibly make the following statement any more clearly or strongly: Policymakers and pundits, with rare and courageous exceptions, are marching (and looking) in precisely the wrong direction.