QUESTION: The Fed says it will raise rates two or three times more this year. My question is this: If the stock market is crashing, why are they still raising rates?
HW
ANSWER: The Fed is raising rates because they must be NORMALIZED given the pension crisis. They are trying to get then back up and if they could, they would jack them up to 8%. If you can imagine, a pension fund under normal conditions needs 8% annual. Even CalPERS came in at 7% and they were insolvent. Rates are rising because of the pension crisis, not because the economy is really heating up or the stock market is booming. The technical resistance stands at the Downtrend Line at the 3% level. Rates will double to reach that area faster than people suspect.
We have a Directional Change due in May and look at the August/September period where we also have a Panic Cycle. Things are not going to be as smooth-sailing as many believe. We have a very RARE Double Monthly Bullish Reversal at 2.25%. A monthly closing above that level and 5% will be seen in a matter of months.
The passage of the defense spending portion of the Omnibus bill ultimately means there will be increased demand for U.S. steel and aluminum within new defense equipment. The contracts within the procurement process will predictably require the use of U.S. parts.
Add the increase in defense spending with the pending global tariffs on steel imports, and the environment is created for foreign investment in domestic steel and metal manufacturing…. Then add into the mix the geopolitical economic relationship developed between India’s Prime Minister Modi and President Trump… And you discover the backdrop for this announcement from India owned JSW Steel:
(Reuters) – India’s JSW Steel Ltd said on Monday it would spend $500 million to build out its U.S. operations in Texas, amid heightened global trade tensions following U.S President Donald Trump’s decision to pursue steep import tariffs.
The company has signed an agreement with the Texas governor’s office, under which the governor has approved a grant worth $3.4 million to the company’s unit, the steelmaker said in a statement here.
The unit, JSW USA, sells high-quality carbon plates to the energy, petrochemicals, defense and other heavy equipment industries.
The company will use $150 million of the funds to improve and modernize its plant in Baytown, Texas, while the rest will fund a new facility, it said. (read more)
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Remember, a key part of MAGAnomics is changing the investment dynamic where the ‘best play’ is to invest in the U.S.
The entire landscape of modern geopolitics is an assembly of various nations specifically focused on their economic interests. Fundamentally, the economics of a nation is the cornerstone for their ability to hold, advance, influence and present their ideology.
Without the underlying economic capability to provide sustainability and stability, the nation, any nation, cannot maintain itself regardless of the underlying political outlook. In short, as the old verse presents: “money makes the world go ’round“. Everything boiled down to it’s essential core – is about economics.
The shock to the system of modern multinational financial interests was created by an earthquake known as Trump; which created a seismic shift via the 2016 U.S. presidential election outcome.
The tectonic political and economic shift was so unsettling to the global elites -who created a decades-long system of global financial interests- they have been thrashing around desperate to regain footing ever since.
All modern political alliances are based on this economic reality, and every single action taken by every member within each grouping is based on their affiliated and interconnected self-interest in the underlying economic equation.
At first, every nation positioned themselves to push-back against a realignment in geopolitical power based on the nationalistic economic shifting created by U.S. President Donald J. Trump. However, as time progresses, and the clear strategy of President Trump begins to take shape, allies and adversaries have begun to accept that POTUS Trump is not going to retreat. Access to a $20 trillion U.S. market is the biggest economic leverage in the world.
It doesn’t matter which continent you point to. If you pull back to the larger view and overlay the economic maneuvering you will find the reason behind the strategic relationship always revolves around economics. War or peace, it’s all about the economics within the equation.
If you scale market economies on a linear continuum according to freedom (size of government in their economic market), and line up the individual nations as flags according to their political outlook on the same linear scale, you will quickly see how the groups cluster in both political ideology and similar economics. [Big government communist nations cluster together; big government socialist nations cluster together; and smaller government fair markets cluster together.] It has always been thus.
The scale of market freedom, in direct proportion to the wealth of the individual within each nation, is the one constant in an ever changing universe.
This is the essential issue with global trade agreements which seek to enjoin free/fair market nations within larger trade deals that also encompass more socialistic political forms of governance. It simply doesn’t work. Generally speaking the free/fair market nations get screwed because they are forced to acquiesce to the insufferable dictates -and rules- of the big government institutional nations. (TTIP and TPP examples)
President Trump has assembled economic SME’s (Subject Matter Experts)to deal with this geopolitical dynamic. Each person specifically skilled to navigate this complex network of internal interests. Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, Trade Rep. Robert Lighthizer, AG Secretary Sonny Perdue, Energy Secretary Rick Perry, and more recently Trade Adviser Peter Navarro.
Each cabinet member has a role within the larger dynamic that is a policy of economic patriotism benefiting the U.S.A.
New trade deals are being negotiated; NAFTA (Canada and Mexico), Vietnam, South Korea, Australia, ASEAN nations, and then China and the EU [with U.K. coming as soon as Brexit negotiations are complete].
All of the currently visible political alliances, like those witnessed within the G20, are based on their positioning for these upcoming trade deals. Every supportive or antagonistic expression by each of these nation states is directly tied to their positioning for trade leverage and negotiation with the U.S.
The MSM will sell visible and spoken differences of opinion, differences of political ideologies, and newly formed alliances around a narrative of nations being anti-Trump. The media like to focus on the cult of personality to create their discussion segments; but that’s nowhere near the full measure of what’s behind international alliances. The actual motives are the underlying economic determinations within each nation.
It has been so long since U.S. economic power was used to the benefit of the U.S., there’s an entire generation that has no concept of this underlying reasoning for national friendliness, or lack thereof, toward each other. We have given away so much national economic wealth many people have forgotten how to accumulate or compete for it.
The ‘We-Are-The-World‘ type leftist globalism (fair share economics) has been pushed for so long, that many people have completely forgotten what it looks like when nations look out for their own unique economic best interests, and actually strive to achieve them.
Heck, many younger Americans may never have seen the competition at all.
Economic competition, territorial economics, is what drives each nation to excel and innovate. The unexpected aspect, buried by almost all media, is how President Trump is empowering all nations to reevaluate their trade status by confronting a global trade system that was diminishing sovereignty.
Perhaps as early as this week we should anticipate hearing about completion a significant trade agreement with South Korea. The deal is known as “KORUS” (KOR+U.S.), and has been in negotiations for over a year.
Part of the recent agreement within the auto-sector of the deal, between Moon Jae-in and President Donald Trump, via Lighthizer and Ross, is an exemption of U.S. steel tariffs for South Korea in exchange for a doubling of U.S. auto exports; from 25,000 to 50,000 American made cars, per U.S. automaker, per year. (link)
The results within KORUS exhibit the intended outcome of the global tariff proposal from President Trump as leverage to enhance the administration policy of reciprocity. The world is taking notice, and China is now beginning to signal their understanding of President Trump leading the international discussion of reciprocal trade.
The unspoken background is that all nations, who have acquiesced to the overwhelming demands of China’s trade position, are now beginning to reassess the value of President Trump confronting the equation head-on. Ultimately it is beginning to sink-in that all nations can benefit from correcting a trade imbalance within their own position. In essence, U.S. President Trump is moving the entire global trade dynamic.
The timing for a U.S. leveraged KORUS deal could not be better. On the geopolitical stage President Trump, through his sheer will, has thrown open the doors to a denuclearized Korean peninsular and is about to engage in direct discussions with North Korean leader Kim Jong-un.
The ramifications for peace on the Korean peninsular, and the economic outcomes therein, are seismic for South East Asia. Thus we see today stunning reports of Kim Jong-un heading to Beijing for discussions of unknown substance.
There is no doubt both Kim Jong-un (DPRK) and Chinese President/Chairman Xi Jinping must engage in talks about the ramifications. China has long used the DPRK as a proxy province for their own geopolitical strategy against the U.S. and western interests.
POTUS Trump using economic leverage to break down the walls of totalitarian regimes is a stunning position for two nations (China and DPRK) who must have thought such an action would be unconscionable a mere eighteen months ago.
Incredible times of jaw-dropping consequence. Because, ‘His Excellency’ Trump.
The Era of the Economic Titan is Back!
PS. A U.S./South Korea trade deal enhances the backdrop, and leverage, of U.S. position toward NAFTA. Canada and Mexico have aligned with the TPP multilateral trade deal. POTUS Trump is negotiating bi-lateral deals with nations within TPP (Japan, Australia, Vietnam, South Korea all ongoing).
Omar Mateen was the Islamic terrorist who attacked the Pulse Nightclub in Orlando Florida in June of 2016 killing 49 people. Mateen’s wife Noor Salman is currently going through trial for assisting her husband leading up to the attack.
Previously it was disclosed Omar Mateen was on the radar of the FBI and interviewed prior to the attack for threatening Sheriff’s deputies. Stunningly, it is revealed today the shooter’s father Seddique Mateen was an FBI informant from 2005 through 2016.
ORLANDO – […] Mateen’s father was the subject of motion by Salman’s defense late Sunday, asking for the case against to be thrown out or declared a mistrial and arguing prosecutors failed to disclose that Seddique Mateen is a former confidential informant for the FBI.
Omar Mateen’s father was also investigated after agents assigned to the shooting case found receipts for money transfers to Turkey and Afghanistan, according to the motion filed by Salman’s defense. U.S. District Judge Paul Byron said he would consider the motion later today.
“I’m not going to address it right now,” he said. “It’s gonna take too much time.”
[…] Mateen’s father, Seddique Mateen, was on the government’s witness list but was never called to testify. His wife, Shahla Mateen, testified. According to the newly filed motion, Seddique Mateen acted as an informant at various points in time between January 2005 and June 2016.
However, he also was found to have made money transfers to Turkey and Afghanistan during the period between March 16, 2016 and June 5, 2016 — a week before the Pulse attack. (read more)
The Spanish government has shown to the entire world that it denies human rights and has absolutely no democratic principles whatsoever. The next step is for the pretend elected government to declare a perpetual state of emergency and suspend all elections nationwide to complete what is rapidly becoming a dictatorship. Thousands in Catalonia have now rise4n up in protest against the Spanish government once again as the arrested the five leaders of the independence movement. The mood in Catalonia is turning more anti-Madrid and based upon the emails we are getting from Spain, many are now beginning to see that how the Spanish government is treating those in Catalonia means that the government views them as well as having no rights.
Clashes with police are being reported with at least 24 demonstrators injured, according to rescue workers. Independent journalists are reporting that policemen in Barcelona were using batons against demonstrators approaching the regional government building. Some demonstrators in Barcelona were even burning pictures of King Felipe VI, which is a crime in Spain. They were also burning photographs of judge Pablo Llarena, who ordered the arrests. The protesters waved Catalan flags and shouted “freedom for political prisoners”.
Spain refuses to respect human rights and Brussels has refused to defend the people because they too seek a dictatorship. The irony here is they have the guts to point the finger at Putin and China as suppressing democracy?
While Trump is being portrayed and the insane President hellbent on destroying world trade, the truth is the tariffs on steel and aluminum account for 0.2% of GDP or just 2% of actual trade flows of $2.4 trillion. On top of that, every president at least since Jimmy Carter has imposed protectionist tariffs on some portion of trade flows. Indeed, Trump has an old-world view of trade as just about every world leader. They look at trade only from a job perspective and NEVER from the viewpoint of the consumer. Anytime a country imposes a tariff to stop what they think is “unfair” competition, in reality, they are creating unfair competition. Why pay $3 for a head of lettuce if you can import it for 25 cents? This only makes the consumer pay more reducing their standard of living. Nobody ever looks at that side of the coin.
In Switzerland, we have the perfect example of the old saying – a little bit of knowledge is dangerous. We have activists who are clearly living in a world they comprehend no less than the financial system. These people have managed to get a referendum on changing in the financial system with the same promises of Karl Marx that this will end all financial crisis to come forever. The referendum is scheduled for June 10th, 2018 after they got 100,000 signatures. The organizers are calling this the Full-Money Initiative. They understand that the bulk of the money is actually created by banks through lending. Their solution is to bar private banks from lending on any leveraged basis by setting limits on lending. They will be unable to lend money beyond what they actually have on deposit. They cannot create money by new loans. This is the most stupid Idea I think I have ever heard. They have no idea what the Full-Ramifications will be of such a proposal.
The promoters are advertising this will make the monetary system more secure and preventing financial crises. “Now we are stepping up our efforts to explain to people where their money really comes from and what the risks are in the old system,” said Emma Dawnay, a member of the organizing team, according to Reuters. They are promoting this Sovereign Money Initiative to stop the financial crisis cycle that they have no idea of how such events are even created.
According to their plan, banks will only grant loans to the extent that they have previously received funds from savers, other institutions or the central bank. For the creation of money then only the central bank would be responsible. However, she rejects that their initiative will create an economic upheaval introducing tremendous uncertainties. Clearly, she is qualified for government service because this is the precise attitude which creates the very thing she is pretending to prevent.
Obviously, she may have a Ph.D. in other fields, but that does not qualify her for anything else. She thinks that banks lending money which leverages the system is the CAUSE of a financial crisis so she wants to hand the power to create all money to the government – the very people who are incapable of balancing a budget or managing even a bubblegum machine. When they are out of bubblegum, they just go steal some more and open shop again since they spent all the money they took in before.
Government is the single biggest borrower in society. So how will they sell their debt without creating more money? Then we have the problem that if the government has to create the money and approve all loans, then politics will enter the scene and you will be unable to borrow if you are part of the opposition. Andrew Jackson destroyed the Bank of the United States BECAUSE they lent money to the opposite political party to defeat him. There was no magnanimous effort to save the country.
Then this idea shows truly their underlying ignorance for if you cut off lending, well guess what! They will be unable to sell their homes and the value will crash because the only buyer will be someone with cash. The town I grew up in, Maple Shade, New Jersey, was once the suburb of Philadelphia. The real estate developer was Barlow who built his mansion (pictured here) in town where my parents met before World War I.
One of my father’s friends had cash during the Great Depression. He bought most of Main Street back then for pennies on the dollar for there was a shortage of money with no bank lending. This is precisely the outcome of this Sovereign Money Initiative if it actually passed. Switzerland would be the greatest short of all time. No bank would survive and the government would suddenly find NO BID for its new debt.
These people are dangerous for they are just like those who want to shut down the Federal Reserve with simply stupid ideas that demonstrate they too fail to understand even how the world economy functions. The first world financial crisis took place in the Panic of 1857. This was the first Panic to appear as a global contagion. The 1720 collapse of the Mississippi Bubble in France and Southsea Bubble in England was a contagion set in motion within Europe. However, the 1857 Panic was set in motion by the declining international economy because of the interconnectedness of the world economy during the 1850s. The financial Panic began in late 1857 in Britain when the Palmerston government circumvented the requirements of the Peel Banking Act of 1844, which required gold and silver reserves to back up the amount of money in circulation. In that instance, the government lifted restrictions because the banks were in trouble.
Of course, then there is the example of the Silver Democrats. They thought that they could raise the price of silver about world levels thanks to the silver miners who bribed them. They soon discovered that people were bringing their silver to the States where it was over-valued and used it to buy gold and export it back home. They kept this arbitrage up and then the Panic of 1893 began and by 1896, J.P. Morgan organized British banks to lend the USA $100 million to prevent it from complete bankruptcy in 1896. President Cleveland was a Democrat and he warned that his own party had imposed unsound finance. The same type of people who could not understand the world monetary system accused Morgan of making a profit on the deal. They refused to see that their ideas were brain-dead back then as well. They preferred to blame Morgan for their own stupidity.
Financial Panics are global contagions. This movement is Switzerland would destroy the country and the depth of the depression would be far worse than the Great Depression. There was such a shortage of money back during the 1930s, that cities began to issue their own scrip to try to save the economy and allow people to economically carry on, which they could not due to the contraction in the money supply. Contracting the money supply as these people propose, would send asset values to virtually zero in Switzerland. They reject any such criticism because they just do not want to believe this solution is completely brain-dead.
History proves one thing – stupid people really mess up the world and then blame others. I keep warning, we are all connected. No country can move counter-trend for their will rapidly find their crisis comes from a contagion outside their control. Even communism failed despite its attempt to maintain isolation. Economics wins at the end of the day. Both Keynes and Marx have seriously inflected the world.
Oh, here we go. Fox News owner Rupert Murdoch has a decades-earned nickname, “Mr. Wall Street”, Chris Wallace is the insufferable media mouthpiece for the financial interests of the guy who signs the front of his paycheck. This is Wall Street -vs- Main Street.
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When Main Street economic principles are applied Wall Street will initially lose. There’s no way for this not to happen. Most of Wall Street is built on the Multinational platform of economic globalism. Weaken the grip of the multinational corporations and financial interests on the U.S. economy and Wall Street will drop… this is not difficult to predict. This is also necessary.
U.S. stocks, centered around U.S. domestic companies, will go up. U.S. stocks, centered around multinational companies -invested heavily overseas, and dependent on exploitation of the U.S. trade deficit- will go down.
As Secretary Wilbur Ross, U.S.T.R. Robert Lighthizer and U.S. President Trump have previously affirmed, they are going to restore the U.S. manufacturing base or lose office trying.
Additionally, the U.S. GDP is measured by deducting the value of imports from the value of everything produced domestically. Therefore, initially as the economy expands, and as more Americans have more money to buy more stuff, lots of the things they buy will come from overseas. This increase in purchasing of imports drives down the GDP despite the overall economic activity expanding.
I hope everyone has been prepared with prior information on how the economic system works so we can understand this weird and predictable dynamic. Increased consumer spending can actually drive down the GDP if the stuff we are buying is imported.
National Trade Council Director Peter Navarro appears on Fox News with Maria Bartiromo for a discussion of ongoing trade initiatives.
Keep in mind, while simultaneously confronting China head-on, USTR Lighthizer has current trade deals, centered around reciprocity, being negotiated with: NAFTA [Mexico and Canada (round #7)], the EU, South Korea (almost done), Vietnam, Philippines, Malaysia, Australia and Japan (almost done).
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
This is a library of News Events not reported by the Main Stream Media documenting & connecting the dots on How the Obama Marxist Liberal agenda is destroying America
Then this idea shows truly their underlying ignorance for if you cut off lending, well guess what! They will be unable to sell their homes and the value will crash because the only buyer will be someone with cash. The town I grew up in, 
