Donald Trump insists that the US economy is booming , pointing to a robust stock market and low unemployment as evidence of a bright economic outlook for America. The reality, however, is that there are warning signs that we’re heading towards a recession . We have already slipped into a recession refineries are running at a record low, just about where they were in 2008,trucking companies are going bankrupt,stores are closing all over the place along with small and mid-size businesses,lay-offs are booming and getting larger and more often and the Baltic Dry Meaure is showing the signs that we begin the recession some months ago.
Stock market manipulation is nothing new, and it’s 12 to 15 years between “economic recessions/depressions” due to inflation of the currency. Racking up debt on credit exactly provides for a recession ! American spending habits does not predict the economy. Americans are shopaholics and mostly survive on credit. They stop spending when there is no credit. Americans are in more debt that during the Great Recession. They have record college, auto, mortgage and credit card debt.
Credit is tightened during a recession as financial institutions know that the default rate is going to explode. Our economy has gone through boom-bust cycles since the 1980’s when credit rules were loosened. They remain quite loose. If people actually had to pay with real money, you’d see how fast this house of card would collapse. Nothing it seems was learned from the 2008 collapse, It’s the same greedy corporate vultures that are bringing the economies of the madhouse down again. I hope there wont be another bail out for these zombie banks/financial institutions.
Falling equity prices lead to quick collapse. Negative interest rates lead to slow collapse. Pick your poison. If Trump were truly the swamp-drainer he claims to be, he would have jawboned the Fed to RAISE rates. Folks it’s really simple . We are already in the early stages of the Trump Recession .
Trends forecaster Gerald Celente wrote recently : The smart money sees the worst ahead. No greater proof than Ray Dalio, head of Bridgewater Associates, the world’s largest hedge fund who is now bullish on gold after parroting my Gold Bull Run forecast some two weeks later. And now, months after I alerted Trends Journal subscribers and having been featured on media around the world, Dalio is now warning of a coming Depression. Dalio is wrong. It will not be a “Depression.” It will be the Greatest Depression .
Hedge fund titan Ray Dalio was on CNBC recently warning of ‘serious problems’ and a bond ‘blow-off’ as a repeat of the late 1930s looms . Ray Dalio is worried that the current landscape is starting to resemble Depression-era conditions that could hammer investors. In a recent LinkedIn post , the billionaire Bridgewater Associates founder said high levels of debt and central banks’ ineffectiveness are two of the key factors that need watching. The U.S.-China conflict is adding to the problems as an existing power battles an emerging one.
“If/when there is an economic downturn, that will produce serious problems in ways that are analogous to the ways that the confluence of those three influences produced serious problems in the late 1930s,” Dalio wrote. “These forces are creating the need for extremely loose monetary policies that are forcing central banks to drive interest rates to such low levels and will lead to enormous deficits that are monetized, which is creating the blow-off in bonds that is the reciprocal of the 1980-82 blow-off in gold,” he told CNBC .
In brief “there is no such thing as a free lunch”. The steady low volatility growth in asset prices during the last decade will revert to a welcome period of high volatility, where market trading replaces reliance on the FED to support buying every dip. It’s only one thing that will trigger this next collapse, it’s the unlimited borrowing allowed thanks to the Fed printing machine. We’re overcomplicating this now.
All that money created has allowed malinvestment to be undertaken in many areas of our economy… We saw this pre-07 when Greenspan lowered rates after the .com bubble burst. People started borrowing money like crazy to purchase homes. at the end of the day it all boils down to the foundational structure… a debt based system that requires exponential growth that is completely manipulated. Eventually the system becomes too complex and breaks down (entropy). What triggers the velocity of entropy doesn’t really matter unless you’re trying to get rich on it. Much of what we see today is the result of the so-called “everything bubble” which has allowed loans to be stacked upon other loans because rising water floats all boats. Whether it is intentional misdirection and a case of economic fraud or people simply getting caught up in wishful thinking does not matter as much as the fact it is the forerunner of disappointment and generally results in a hard landing.
History has proven that while government spending can supplement the economy, however, over the long run government spending is a poor substitute for the free market in allocating capital to where it is most effective. There very likely will be a severe depression and soon. The population hordes trying to break the borders of the advanced nations is a clanging warning. The edges of civilization are eroding to put it mildly. The pie is shrinking while the mouths to feed explode higher in the poorest areas. This is about cultural survival and any semblance of a structured society based on Western ideals. The West needs to get fully defensive.
It’s time to accept that Russia and America share some common interests. In the three-way empire play with Russia-China-America, it’s two against one. We need to make an ally and tilt the power back our way. Russia is more culturally similar than China. Unfortunately, Mr. Trump doesn’t control foreign policy . John Bolton is the wrong guy at the wrong point in the global economic cycle.
Former Fed chairman Alan Greenspan on the risk of recession
Alan Greenspan, former chairman of the Federal Reserve, joins “Squawk on the Street” to discuss the spread of negative interest rates around the world, the risk of recession in the U.S. and more.
Peter Schiff Warning : The House of Cards is tumbling down on Trump’s watch
Peter Schiff is an American libertarian, stock broker, financial commentator, and radio personality. He is CEO and chief global strategist of Euro Pacific Capital Inc., a broker-dealer based in Westport, Connecticut.
According to Peter Schiff, the chief global strategist at Euro Pacific Capital, it was a “huge mistake” for the Federal Reserve to cut interest rates last month. “They never should have taken rates to zero in 2008 and held them there for 7 years,”Peter Schiff told Russian TV RT. “Zero interest rates and quantitative easing have created problems in our economy that will take generations to fix. However, the healing will never get underway if the Fed goes right back to zero which is where they are headed.” “the Fed is not causing the recession; they are just unable to delay it any longer.”
Hard to not like Schiff, and see his logic. it was a “fraud and a crime” for the Federal Reserve to cut interest rates last month. Schiff is right, he is just pointing out that we’re all poorer, working longer and still don’t have enough to satisfy Shylock. In reality the debt will never be paid off without massive QE4. And everyone knows that. The national debt continues to raise by over a trillion every year. This is nothing other than Modern Monetary Theory by stealth . Of course Quantitative easing , Zero interest-rate policy and Negative Interest Rate Policy are a joke. Of course rates should have been raised during Obama’s presidency. The only thing Zero interest-rate policy and Negative Interest Rate Policy allows is more Consolidation. Everyone should know that by now. I like to say Centralized Confiscation and Consolidation through Counterfeiting. It’s really that simple.
At this point in time there are 2 ways out of this debt trap. Debt jubilee or complete watering down of ALL currencies. The world can’t possibly grow it’s way out of this cycle. Shiff is outspoken in his belief that the U.S. economy is barreling full-throttle toward another recession and that this event has the potential to erode the value of the dollar and the United States’ dollar-based investments in a cataclysmic fashion. Schiff’s investment style is strongly influenced by his libertarian political views and by his firm conviction that U.S. economic policies are fundamentally unsound.
According to Schiff, the Federal Reserve sets artificially low interest rates that discourage Americans from saving money and encourage them to rack up credit card debt. Government intervention through regulation, stimulus programs, and corporate bailouts throw the economic equation even further out of balance. Schiff gets too much criticism for this. His forecasts aren’t just simple broken clock eventualities. He accurately forecasted exactly how the housing crisis would unfold, not just that it would drop. He also forecasted the Federal Reserve would do exactly what it did afterwards with QE and rates to zero. The fact that they’ve gotten away with it this long is what people hate about Schiff prognostics . But Schiff remains consistent and still tries with his predictions on that part regardless. Industrial output just hit three year low. I would say we are already in a recession.
Depressions and recessions are inherent in a debt driven economy and need to be allowed to playout. Economic downturns cleanse the economy of unproductive debt that is distorting the markets. The reason Capitalism succeeds when socialism does not is because Capital allows unproductive entities to fail. Let the markets determine what succeeds not a central authority. Link the rate of change of private sector debt to the interest rates, end the central banks and let the chips fall where they may.