In response to rapidly changing current political and economic events, I’ve decided to publish a very short and light piece on the unprecedented changes taking place. Expect more detailed analyses in the coming weeks.
For now, I just congratulate President Trump. He did it! But I’m not congratulating him for what most people are thinking of. I congratulate him for yet again exhibiting a rare combination of luck and cleverness to be in the right place at the right time to capitalize on somebody else’s problem and make off like a bandit at his benefactors’ expense.
The man who helped troubled Deutsche Bank establish a presence in the American banking industry when American banks found him too toxic to touch, then repaid DB by cheating them out of some of the cash they loaned him, has now created the ultimate rip-off of the American people. Instead of protecting the economy and our Constitution by abolishing the Fed; instead of braving the wrath of investors and Wall Street via publicly ordering an orderly unwinding of the bubbles blown by Street players (bubbles blown with the help of a largely unwitting, but all too happy, public), Trump has allowed the Fed to de facto nationalize our economy to “solve” the current bubble crisis. This means the American people will now eat the trillions of bad debts created by the banking, education and business sectors of the economy. It also means that Trump allowed the Fed to make an end run around its own governing laws as well as our Constitution without so much as Tweeting to alert the public. In fact, Trump congratulated Fed Chair Jay Powell for helping our government literally take an axe to our legal system, usurp legal and constitutional authority, and pave the way for breathtaking new powers to the Fed itself and the office of the President. And all done in ways that the public hardly sees, let alone understands.
Sadly this was not situation that couldn’t have been forseen. Nor is it entirely the fault of Wall Street. War hawks and progressives together had a massive hand in this mess we now find ourselves in, by larding up public expenditures and bloating our national debt to the point of pushing interest rates to historic lows. This forced everybody (from banks to retirement savers) to load up on risk to achieve yield. That process, in turn, slowly but predictably paved the way for the entire global economic system to become unsustainable, while creating the perfect excuses for guilty parties on all sides to demand bailouts when the inevitable finally happened. It isn’t just the banking industry that’s gone bad, it’s our whole warfare/welfare economy that sunk us, though nobody on either side can see it.
If you thought the $4 trillion bailout in 2008 was a lot, wait until you see the size of the bailout that coming. Taxpayers and Main Street will rapidly be deep sixed to pay the tab, which is already near or above our annual GDP. This new debt will sit atop the nearly $4 trillion that the Fed couldn’t pay down from the 2008 debacle, and will meet the $4-5 trillion in unfunded Social Security obligations coming due around 2024 and currently staring at an empty Social Security Trust Fund. As a result of the measures being taken to keep the economy falsely propped up for a few more years, however, The Trump family, unlike most of the rest of us, will walk away in better shape than ever. In exchange for encouraging economic policy to head towards unprecedented low interest rates and high inflation (both of which decimate workers), they’re now getting the fiscal environment perfect for big real estate developers to make vast sums of money in. The Trumps will walk away with more economic opportunity than they know what to do with, while more Americans than ever will become homeless of barely get by.
So to all the war hawks, progressives and Trump supporters out there, I say enjoy the new socialist government and economy on your paltry $1,000 a month helicopter checks. Its going to be a veeeerrryyy expensive new form of society, and you helped buy it! A bag of burgers and fries will soon be costing more than your current weekly meal budgets while college, health care, and big homes with granite countertops will become a dream of the past for average families. Spring may be on the horizon for Wall Street and crony businesses once again, but the longest, deepest economic winter in American history will soon be arriving for Main Street. But I’m sure the Trumps will still welcome your support.
“Don’t Cry for Us, America”.
Economics Watchdog 