The Trump Collapse Scapegoat Narrative Has Now Been Launched

Tyler Durden's picture

Authored by Brandon Smith via Alt-Market.com,

Last week was a rather crazy one for the news feeds, with cyber attacks and “Comey memos” and a host of other wild mayhem, it may have been difficult for many people to keep track of it all. That said, there was one event that I think went partly under the radar, and I think it is an important signal for anyone concerned with the ongoing process of economic collapse in the U.S.

Generally, the American public holds very little vigilance when it comes to economics. They are distinctly unaware of fundamental indicators such as commodities demand, energy usage, manufacturing, imports, exports and international shipping, etc. What they do take note of, and what the mainstream news will tell them about in 30 second blurbs, is the state of unemployment and whether stock markets were down for the day or up for the day. These two “indicators” are the extent of the average person’s exposure to fiscal health.

This is why the Federal Reserve and the establishment have been meticulous over the past several years in their efforts to keep employment statistics highly manipulated to the positive side and why they have been injecting untold trillions into stocks around the world through various measures including no cost overnight loans.

However, over the past couple of years something has changed. As I warned they would do in 2015 in my article The Real Reasons Why The Fed Will Hike Interest Rates, central banks including the Fed have been backing off of stimulus measures and they have now begun a series of interest rate hikes. Look at it this way — imagine the economy has a terminal disease and the only thing keeping it alive is a highly addictive drug called “free money.” It’s a rather terrible life, barely worth living, but the economy still has a faint pulse as long as the drug is administered. Now, what would happen if the Fed suddenly cuts off the drug supply? Well, the economy will die in a very frantic and horrible way.

Low interest rates and Federal Reserve loans represent the purest form of the free money drug, even more so than the bailouts and QE. And now, those interest rates are rising, and the drug is being taken away.

These marginal rate hikes might not seem like much — .25 basis points here and .25 basis points there. And they are not much, unless you are a corporation borrowing billions of dollars at a time so that you can stave off your exposure to quadrillions in derivatives debt and so that you can purchase massive shares in your own stock to keep its value artificially elevated. Cycling this borrowed cash and paying the Fed back is rather easy for such corporations as long as the loans are essentially free. But when they have to start paying interest on that cash, even at a low rate, the costs add up at lightning speed.

ANY interest rate hikes in this environment make borrowing from the Fed untenable for corporations seeking to prop up their stocks and the stock market at large.

In my estimation, based on previous Fed measures such as the removal of QE from the system in 2014, it takes around six to eight months for the effects of policy shifts by the Fed to become visible on the main street economy and in equities. I believe we are about to see the effects of interest rate hikes on our system within the next couple of months.

I put very little value in stock markets as an indicator of anything. In reality, stocks are a fraudulent circus based on perceived value and perceived demand rather than true value and demand. In most cases, stocks crash in the FINAL phase of an economic collapse, not in the beginning phase. If you decide to start preparing for a crisis after a stock market decline then you are probably too late.

I am revisiting this topic here because I want to remind people that the full and tantamount blame for any economic crisis (and the final phase market crash) in the near future is placed on the Federal Reserve and international banks. All future shocks to the financial system were made possible because the establishment and the Fed have gutted our economy, stuffed it with the fluff of fiat stimulus and left it to lumber aimlessly since 2009.

Now, because of the Fed’s efforts, stocks have been rising for quite some time with only a few moments of obstruction, due again, to their policy shifts. These efforts have conjured a 20,000 point Dow Jones, but nothing else positive for the economy. The one constant, though, has always been low interest rates.

With interest rates increasing, I would point out that market behavior has changed. The meteoric rise has stalled. In the past few months stocks have barely budged 1 percent either up or down per week. Except for last week when something strange happened; markets suddenly dropped nearly 400 points in a single day. Why? Well, that is a subject up for debate, but the majority of mainstream news outlets will tell you that it was all Donald Trump’s fault.

I have been warning since long before the election that Trump’s presidency would be the perfect vehicle for central banks and international financiers to divert blame for the economic crisis that would inevitably explode once the Fed moved firmly into interest rate hikes. Every indication since my initial prediction shows that this is the case.

The media was building the foundation of the narrative from the moment Trump won the election. Bloomberg was quick to publish its rather hilariously skewed propaganda on the matter, asserting that Trump was lucky to inherit an economy in ascendance and recovery because of the fiscal ingenuity of Barack Obama. This is of course utter nonsense. Obama and the Fed have created a zombie economy rotting from the inside out, nothing more. But, as Bloomberg noted rightly, any downturn within the system will indeed be blamed on the Trump administration.

Fortune Magazine, adding to the narrative, outlined the view that the initial stock rally surrounding Trump’s election win was merely setting the stage for a surprise market crash.

I continue to go one further than the mainstream media and say that the Trump administration is a giant cement shoe designed (deliberately) to drag conservatives and conservative principles down into the abyss as we are blamed by association for the financial calamity that will occur on Trump’s watch.

Last week’s sudden market bloodletting is important in this regard; 400 points down is hardly a flesh wound to a 20,000 point Dow, but the media’s reaction to it was very revealing on what the future has in store. Multiple news outlets responded by immediately connecting the drop to Trump and the absurdity surrounding the “Comey memo” — a memo which no one in the public has seen proof of. The claim is that this level of turmoil around Trump might lead to impeachment and that the threat of impeachment would kill the stock market bounce which the media also claims was driven by Trump’s promises of corporate tax cuts. It's a lie built on another lie.

It is interesting to me that the mainstream media never said the market drop was caused by “Comey’s turmoil,” or by “The Washington Post and The New York Times’ turmoil.” No, they called it “Trump’s turmoil.” Last week’s stock dive was, in my opinion, the official launch of the Trump collapse narrative. The establishment was beta testing it for months, but now, the program has gone live.

Every single stock decline from now on, as well as the ultimate economic crash, which will become visible to the public in short order, will be blamed on Donald Trump and conservatives by extension. As I said, he is the perfect scapegoat.

I have been very critical of Donald Trump recently, and it is my view, according to the evidence and his swift retraction of nearly every promise he made to the voters during his campaign, that Trump is controlled opposition. But, I would never lay the blame for our fiscal decline at his feet. Trump does not have the power to create that kind of disaster; only the global banks have that power. I’ll say it again — the Federal Reserve is raising interest rates into a major financial downturn. This will be the trigger for the next phase of collapse, not any drama surrounding Donald Trump. Everything else, from Comey to North Korea, is distraction.

The Fed has done this before. In fact, the Fed has a habit of raising interest rates at the onset of economic instability or right in the middle of a downturn, as it did in 1928-1929 triggering the Great Depression, and in 1931, adding fuel to the fire of financial catastrophe. These particular catalyzing policy actions are partly what Ben Bernanke was referring to on Nov. 8, 2002, in a speech given at "A Conference to Honor Milton Friedman, the Paul Snowden Russell Distinguished Service Professor Emeritus, On the Occasion of his 90th Birthday.”

“In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction were much more severe and widespread than would have normally occurred during a downturn.

 

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”

Ben Bernanke finished his astonishingly honest assessment with a lie. They are indeed doing it again… but this time they have made sure they have a president and an entire political ideal to blame it on.

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Herodotus's picture

Both political parties will disappear as a result of the collapse.

The_Juggernaut's picture

There's one more week to sell in May and go away.

AltRight Girl's picture

As long as jew Soros is getting the short end of the deal, I'm ok with the collapse.

Soros Keeps Betting Against Trump Market Rally and Loses


benb's picture

"I continue to go one further than the mainstream media and say that the Trump administration is a giant cement shoe designed (deliberately) to drag conservatives and conservative principles down into the abyss as we are blamed by association for the financial calamity that will occur on Trump’s watch."

Not so fast Brandon. Podesta and the Clintons may get arrested and Soros’ plane might crash…may happen. The good guys don’t always lose. A lot of people are fucking pissed off and want justice.

The top of the economc structure is a manipulation and as such can be modified.

 

runningman18's picture

He never said they would win.  He just made it clear what their plan is...

fx's picture

Brandon, I suggest you look beyond the fed funds rate if you want to get a true picture of monetary conditions. As things stand now, overall monetary conditions for the US economy are actually MORE accomodative than at the time before the three rate hikes by the FED. That may not change the overall argument, but it will strongly impact the timeline and the chain of events. broaden your view on the economy or you will come to premature (or wrong) conclusions.

LotUnsold's picture

I initially read that as "The top of the economic structure is a manipulation and as such can't be modified."  There are good arguments for both views.

The BigPram's picture

you can add an extra 1200/USD a week to your income just working on the internet a few hours each day, check out this page... http://bit.ly/2jdTzrM

fx's picture

I only accept payment in bitcoins now.

oncefired's picture

Trump should give an off the cuff Press Conference, using Straight Talk like only he can and warn everybody exactly what is going to happen. Give the Little guy a Chance to Exit and lay it all on Obutthead & Grandma Yellen. Dive in and explain the Bogus Unemployment Numbers & Other Bogus Stats...then lay it at Grandma Yellen's Feet, while announcing an Audit of the FED!

Common_Law's picture

They had Hoover to blame the last one on. Last business man president we had until trump...

Hoovervilles/Hoover sandwiches and then FDR was president until he died...

False_Profit's picture

The jesuits always make sure they are shielded from blame...

They have been engineering economies for thousands of years with the guidance of the demiurge...

2017 is the 500th anniversary of the protestant reformation...the jesuits must make their wrath felt in a big way...

Live free or die, for death is not the greatest of evils. -Gen John Stark 

Gott mitt uns...

tkoski6600's picture

"Demiurge": my new word for today.  Thank you.

JackT's picture

There's plenty of blame to go round.

G-R-U-N-T's picture

There is only one party Herodopus. If indeed, you believe in two, your delusional.

karenm's picture

Exactly. Trump is a longtime supporter of the Clintons and democrats. Google pics of him buddy buddy with the Clintons on numerous occassions, along with many liberals.

Trump is playing the part of a right wing conservative, all an act. In reality. he's a globalist just like all politicians and world leaders are.

There is no right or left among the financial elite, there are instead, two classes.

 

Rulers and slaves.

The right versus left paradigm is nothing but theater to keep the stupid ass masses fighting against each other instead of realizing who their true enemy is. That would be the top echelon globalist bankers, etc, etc.

 

Time to get out of your stereotype identity as a conservative, liberal, or whatever label you accept pinned on you. Time to wake up for real and recognize your true enemy, who isn't the other sap trying to slave away in debtor's prizon, it's the prison itself and its owners.

Buck Johnson's picture

They sure will because this time it will be worse.

 

peddling-fiction's picture

When it does not work, double down and censor everything.

Truther's picture

Trump knows it. He's been elected (seleted) to manage the fucking collapse.

LotUnsold's picture

I'm surprised you've got 3 down ticks there, Truther.  That was my view before the election.  He's a master of bankruptcy, good on large scale action and publicity - and will go down as one of the great Presidents of all time because of his New Deal which will repackage slavery as self-reliance and American entrepreneurship.  Meanwhile all the infrastructure for Smart Cities and Agenda 21 will get built on the back of a lower standard of living.  It could still happen, though I tend now to view it as a war between two real factions, but that could easily be me being taken in.  (Though I certainly don't believe Ron Paul's concerns about assassination.)

oncefired's picture

The Libs & Rinos are out of control. A Good March on Washington of Heavily Armed Deplorables is what the Country needs to clean out Congress, MSM & K Street. The Founders knew this: "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants". If Trump can keep the Military on the periphery to guard against interference from Foreign Powers getting involved, we can clean the place out, let Trump handle the debt negations and immediately convene a Convention of States to impose Term Limits. Unfortunately the poor Snowflakes will find a way to get involved, which means they will also have to be dealt with. Then immediately send a Group out to get Soros and bring him back for a public hanging by the balls from the Washington Monument!

land_of_the_few's picture

If the collapse involves other countries then it will be immediately obvious it is not his fault.

Especially if they go down first. which ones have troubles?

Sweepstake should involve:-

Ukraine (the swinging patient still has not managed to kick the stool out from under the light fitting despite heroic efforts)

Libya (the West will install a Colonel Kurtz and encourage descent to pre- Iron Age behavior if permitted)

Bosnia and Herzegovina

Albania

Montenegro

Greece

Portugal

Georgia

India

Turkey

Algeria

South Africa

Nicaragua

Wildcards - Austria. Beware of open-top car parades. Australia, because of the spelling. Canada, Vancouver Property Developer Chainsaw Massacre.

Poland and the Baltics will not collapse but they will revert to Feudal aristocracies led by foreign landowners somewhat like the Amish. Their economies and agriculture will benefit hugely, and they may permit servants to learn to write occasionally although knowledge of celestial mechanics and Ryanair will be severely repressed, in favour of singing about flowers and frogs. They are making huge strides in this direction already.

 

jamesmmu's picture
Washington Post Claiming Russiagate Still Valid Even If Seth Rich Was DNC Leaker.

http://investmentwatchblog.com/washington-post-claiming-russiagate-still...

Jimbeau's picture

In other news, the sun will rise tomorrow.

Catahoula's picture

Warms my heart with laughter. Market will continue to rise.

Yen Cross's picture

 Donald Trump is a mess. He shoots from the hip, and is a scumbag New Yorker.

 What a disapointment.

 The euro is completely screwed.

HRH Feant2's picture

BTC: more than $2550.

Anteater's picture

'OBAMA AND THE FEDS' is a perfect diversion for Gingrich's Contract on Americans, GHWBush's Gramm-Leich-Bliley bank deregulation, Wall Street's Gordon Gecko Dot.Con neutron bmob, GHwBush-Marcos-Mossad 9/11 Hard Coup, Bush-Cheneys two unfunded $5T debt oil wars, Bush's Home for Everyone Wall Street Gordon Gecko Mortgage.Con, and Wall Street:Congress:Hank Paulson TBTF Directive, all long before Rodham schreeched in 2008 'Aren't you gonna DO something about this guy?! (Obama) at the Convention.

Obama and the Fed Bank LITERALLY HAD ABSOLUTELY NOTHING TO DO WITH OUR ECONOMIC COLLAPSE.

Trump-Kushner's New FAG budget and No Taxes for Rich Men WILL COLLAPSE THE USA FLY-OVER SOCIETY.

 

Singelguy's picture

How long have you been hiding in your mom's basement?? Your posting ckearly demonstrates your absolute total ignorance of what is really going on!

G-R-U-N-T's picture

"I put very little value in stock markets as an indicator of anything. In reality, stocks are a fraudulent circus based on perceived value and perceived demand rather than true value and demand."

Sorry, but the Dow circus act will go 30-40k, once the EU goes down the toilet.

runningman18's picture

Even if it did, the rest of the economy is tanking, so who cares? 

problemfixr's picture

Wait a minute, is this the same Brandon Smith who gave us all the following advice on 4/2013 when Bitcoin was about $175?  Yes, I believe it is the same man.  Nice call, Brandon.

 

https://youtu.be/XhwJWsloC0Q

 

 

 

 

runningman18's picture

I love the argument by bitcoin people that because bitcoin's "value" is high, that somehow legitimizes it.  People pay hundreds of thousands of dollars for artwork made out of human feces.  That doesn't make it legitmate art.  Where in this video did he say bitcoin's supposed value wasn't going to rise?     

problemfixr's picture

I'm surprised you could take your mouth off Smith's cock long enough to type your question.  The man said what he said, on video.  Deal with it ass-clown.

runningman18's picture

Ha, pre-teen ad hominems aside, you can't even answer a simple question.  Just answer my question.  Where did he say that bitcoin wasn't going to rise in supposed value?  I see him criticizing Bitcoin for other reasons, but he didn't say that the price wasn't going to go up.  I'm betting you didn't even watch the video, you just saw the title and thought you had some kind of "AHA!" piece of evidence.

hxc's picture

I don't own bitcoin. But if i'd bought at 25 cents, then i'd be sitting pretty...

runningman18's picture

I guess, but then again, these things tend to crash as quickly as they jump.  The bitcoin guys might be crying in their fruity drinks this time next year, and then what?  If bitcoin loses all its value will they argue that it is then de-legitimized?  The value argument is stupid.  If you're trying to make a profit, then that's good by you.  I just don't see a digital phantom like Bitcoin or any of the other cryptocurrencies as a practical replacement for precious metals backed money which worked pretty well for centuries before the banksters pushed fiat on us.     

el buitre's picture

Few people are asking what the real meaning and cause for the truly exponential rise in BC and other cryptos is.  I think Ron Kirby nailed it on his interview with Greg Hunter yesterday.  It represents the collapse of faith in the US Dollar.  Yes, fiat in general but the dollar in particular.  This is shown by a modest drop in the dollar index over the same period.  Big money knows that the collapse is coming and they are trying to move their currency into anything which will have value afterwards.  Kirby states that the only reason that PM's have not taken off even more than cryptos is that the CB's and giant banks have them "strapped to a gurney" with unlimited naked shorting of their futures market.  But why have the dickheads permitted the cryptos to take off during this segment of the collapse?  They are similar to PM's in that they are "scarce," thought artificially so.  Why haven't the dickheads created derivative and futures markets to control the nominal price of the cryptos as they have the PM’s?  Either they are stupidly short sighted or they have their thumbs on the scales to favor the cryptos.  While many are basking in their new fortunes with cryptos, are they to become, shortly, the mark of the beast after fiat dies?

major skeptic's picture

BRANDON SMITH CANNOT BE TRUSTED!!

Numerous commenters on his site are having their perfectly valid comments deleted.

I am one of them and I have proof, should anyone not believe me.

This isn't the first time for me and I now suspect he may be an agent provocateur.

Can't delete this one, Brandon!

runningman18's picture

Blah blah blah, another fucking lunatic gets kicked off a website for being a lunatic then says this author or that author is an agent provacateur.   Try doing something constructive with your life - build a better website than his and show him what's what.  No one cares about your sob story.  

Dragon HAwk's picture

Every Corporation going down the Tubes knows, Sometimes you need a good hatchet man..  somebody has to turn out the lights and answer the phone on the Last Day.

coast1's picture

the removal of QE in 2014....not...the QE continues only in stealth...QE will never end until it does.

zerohedgeJUNKIE's picture

I wonder what will replace the democrat and republican? 

otschelnik's picture

Bring the recession on, sooner the better we get over it.  Fed policy has just kicked can down the road. 

 

ds's picture

Greed and Fear are the primordial drivers of both the Predators and the Preys when it comes to markets. Spins are aplenty...luring you to believe that the market is the microcosm of the real economy where reeal People live or die, etc. Market Pundits/Economisses aplenty to keep their paychecks/bonuses...furiously selling their snake oils in deformed markets that no longer price "risks". 

You can survive if you understand that all these are Games with odds worst than what Casinos can offer. The vile Predators and the shrewd Preys will be around in lesser numbers as they tussle in the future. Both are laughing at all the Spins to stick all the market blips on Trump or even a chimpanzee. Where it really sticks is with the Muppets unashamedly called by the banksters, etc.