President Trump: The NEW one and only politics thread

It's owned by the banks. And it serves politicians. It's whole purpose is to shit all over the dollar to enable all of the debt that we have accumulated as a country. Unfortunately, they have become a self-fulfilling thing. Each time the inevitable credit crisis has come over the last couple of decades of them getting more and more insane, rather than allowing a deleveraging, they have resorted to more convoluted schemes to monetize more debt -- rather than making the hard decision to be responsible and not keep selling out more of the future for short-term sugar highs that come with bigger costs than even the short-term benefits. They answer the debt problems they created. ... with more and more credit and debt, and it has now laid the seeds for economic stagnation and an even worse credit crisis that is coming. That is where we are at, with or without Trump's wishes for more of the same. Out of everything he has done, this was actually the most honest. He just said publicly, what every president says privately, even as they laid bullshit on the public and let the out-of-touch idiots in the Eccles Building use economic mumbo jumbo to justify the fact that they exist solely to monetize endless debt and create cedit and steal from anyone who would like to save and invest (and not see their paychecks robbed by them as the purchasing power of the dollar goes to pot), in order to inflate away as much of that debt as possible.

Supposedly during the height of the Vietnam War, when LBJ wanted cheap money to finance the Vietnam war and try to inflate the cost away, he summoned William McChesney Martin to Texas, cleared the room, and shoved Martin against a wall and demanded the Fed repress rates. Martin did, and it put us on the path into the 1980s, in which the dollar lost a shocking amount of its value and Americans saw prices on everything rise, slowly at first and then in leaps and bounds throughout my childhood. Except for one interlude in which Paul Volcker did the opposite to deal with an intractable stagflation situation that they had caused and which really depressed the county, it's where we have been since.

So Trump running his mouth was relatively mild. And what you said about the stock market? The stock market loves the fact that those clueless idiots have spent the last decade with their thumbs on the scale of finance. With real rates so far below nominal rates because of them, it has sent asset prices flying. The last decade has been the 1920s all over again, and what they did to cause that was nothing compared to the debt mess they have now created. They have turned the stock market into a casino. When Trump made those comments? Even the immediate reaction wasn't the sell off you are anticipating. The S&P 500 spiked on it (the computer algorithms quick read was "political pressure to keep the punch bowl spiked a little longer. Party on!")

At some point, there is going to be a loss of confidence. It won't be because of Trump running his mouth or their "independence" being compromised. It is going to be the culmination of having created a $4 trillion balance sheet that has created a ridiculously overleveraged world, and something giving. It goes beyond them, because this is a global thing. The other central banks that joined in on the competitive devaluation game to live a fantasy, have made it much bigger than just what the Fed did. We live in a global world and the credit they create knows no borders. Combined, the amount of worldwide credit they have created since 2008 is staggering, and the number of ghost companies worldwide that have been kept alive on leverage and borrowing, the countries that are insolvent due to decades of spending like mad but are still on life support because rates are being artificially suppressed, the corporations that have overleveraged themselves to buy back trillions of dollars of their own stock (which has sent stocks to insane valuations),while their executives have cashed out, etc. is staggering. There is a debt implosion somewhere on the horizon, and if we aren't in the 9th inning of their sugar high , we are at least in the late innings.

Trump will get the blame when the next crisis (and it can come from any number of overleveraged areas this time around) comes. But this all was created well before he was elected. He may or may not be smart enough to realize that is on the horizon. I suspect he thinks he'll be able to foist off the blame on the Fed, rather than the fact that he cut taxes and increased spending when we go into recession and we don't get the silly GDP growth numbers they have thrown out there. He was trying to create a fall guy today.