The mainstream media has been carefully crafting the propaganda meme that the Trump administration is inheriting a global economy in “ascension,” when in fact, the opposite is true. Trump enters office at a time of longstanding decline and will likely witness severe and accelerated decline over the course of the next year. The signs are already present, and this fits exactly with the basis for my prediction of the Trump election win - conservative movements are indeed being set up as scapegoats for a global economic crisis that international financiers actually created.
President Trump’s initial emphasis on renewing the US manufacturing base is largely symbolic. Even if his administration were to successfully use tax incentives, protectionist measures and immigration policies to re-patriate factories and labor, and even if government were to spend big on fiscal stimulus, it still would not solve the structural leverage problem facing the US economy.
As a result of continued market underperformance, assets under management at Jeremy Grantham's iconic GMO have tumbled to about $80 billion, down from a peak of $124 billion in June 2014, a drop of 35% in two and a half years.
A very large percentage of the American public (including myself), remain irate at the complete lack of any justice served with regard to finance criminals in the aftermath of the economic collapse of 2008/09. When it comes to greedy, unethical behavior in the wake of that tragic period, Steve Mnuchin is in a class of his own. To appoint such a toxic financial oligarch to Treasury Secretary is a serious slap in the face to all American citizens.
It's official. As previewed earlier this morning, when we reported that according to media reports, Sullivan & Cromwell lawyer Jay Clayton, a long-time favorite of Wall Street and especially Goldman Sachs, has been nominated to lead the Securities and Exchange Commission.
Donald Trump is preparing to appoint another Wall Street proxy to the top Wall Street regulation, supervision and enforcement post. According to the WSJ, Wall Street M&A and IPO lawyer, Jay Clayton, is Trump's leading candidate to become chairman of the Securities and Exchange Commission and could be announced as the nominee as soon as Wednesday.
Cognitive dissonance is a powerful drug. It makes otherwise-very-intelligent people goofy and incoherent in their thinking and blinds them to certain realities that they should normally see right in front of their noses. You’ll hear hundreds of theories and rationalizations on Trump’s miraculous victory, but a reason you will almost never hear is also the most likely one: Trump won the election because he serves the interests of the establishment.
The world has gotten so used to ultra-low interest rates that even economists and money managers seem to be shocked by what happens when rates start creeping back towards normal levels. Some of the mini-bubbles that formed in an essentially free-money environment are now starting to leak.
"Markets don’t have a purpose any more - they just reflect whatever central planners want them to. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable..."
Trump’s election has given hard money advocates the most hope in over 30 years that our nation’s failed monetary policy will be reformed. Mixed with the current hawkish wave that is already percolating in the veins of some FOMC members, Trump’s future appointments can have a huge impact on the central bank’s immediate decision-making. One can only hope that the president-elect will stick to his guns and do the right thing.
"We are experiencing deep economic problems and it is the fault of the economics discipline. Their macro theories suck... But, there is no mechanism forcing it to alter its models when they don’t appear to work."