Earlier today President Trump tweeted out the possibility of closing the Southern U.S. border if congress cannot find a solution to funding border security. Sounds good….
I’m not sure if even President Trump realizes how much support there would be for this approach. Mexico would be lighting up the switchboards in DC if that happened. The Mexican economy is entirely dependent on access.
ANSWER: The entire problem of lowering interest rates to “stimulate” the economy demonstrates that central banks cannot really manage anything. This theory is based upon the idea that if rates are cheap then you will borrow. They fail to even understand HOW the economy functions. The stock market and the economy has NEVER peaked with the same level of interest rates TWICE in history. If you BELIEVE the market will double you will pay 20% interest for a year. If you do not BELIEVE the market will rise at all, you will not borrow at 1%.
Pension funds were based upon the idea that at 8% you double your money in less than 10 years compounded. The system of a pension cannot function at interest rates of 1-3%. This is why states are raising taxes and going broke. They have to make up the losses on investments. Then throw in the corruption of governments. They directed pensions to be “conservative” and thus must own typically more than 50% government bonds up to 85% generally and some are at 100% like Social Security. The lower rates on government bonds, the greater the losses and thus taxes must be raised to compensate for state pensions.
Then, so many funds ran into Emerging Markets to try to compensate for the losses on government bond holdings. Spanish banks ran into Turkish debt which they assumed would become a member of the Eurozone. Turkey was one of the first members of the Council of Europe in 1949, and it became an associate member of the EEC in 1963, joined the EU Customs Union in 1995 and started accession negotiations with the European Union in 2005. However, ever since Erdogan, all negotiations with Turkey to join the EU came to an end in 2017.
Therefore, the Fed realizes that the next crisis is a pension crisis and they need to raise rates to help try to bail out the pension funds. They will not be able to raise the rates fast enough to avoid the crisis coming very rapidly which will contribute to raising tax rates and further suppressing economic growth into the future
The investment instruments created by Wall Street billionaire hedgefund managers and institutional multinational banking interests; operated by robotic algorithmic data networks, while programmed to twitch and flitter with coded signals only decipherable by the hired engineers; are wildly swinging amid their detachment from Main Street.
This fluctuating Wall Street process is likely to continue; actually, it’s going to get a hell of a lot worse; because the invisible data driving the activity behind the swings is based on investment bets, derivatives that are entirely disconnected from actual Main Street financial results. Chairman Hassett discusses:
.
Full Spectrum: “The Main Street-Wall Street demarcation has been fortuitously blurred, all to Wall Street’s benefit. Recall the mass migration over the last few decades from defined pension plans to self-directed IRAs and 401ks. This was Wall Street impregnating Main Street with Wall Street’s sweatless ethics. Main Street is very much ‘in the market’. Trumponomics desperately needs a tutorial to the American people explaining the rockiness of the transition and all that’s at stake.”…
QUESTION: Mr. Armstrong; Your analysis is really remarkable. When the Dow was making new highs in October you said it was not breaking out. Then you said it would correct to retest the monthly support. You even warned that the bulk of the decline was always before the holiday as fears would grow for what would happen after the market reopened. You always get the highs and you even named the day of the low this week the week before. How can your arrays do this? I know that they do. My question is have you put any effort into discovering why cycles work in the first place?
HD
ANSWER: That is a question I get often and it seems to me to be up there with is there God and what is the meaning of life? All I can say is the foundation of EVERYTHING is a cycle. Here is how sound travels known as the Doppler effect.
Sunlight also travels in waves. Change the frequency and you get a different effect. There is a cycle to absolutely everything around us. The Arrays are composed of a correlation of 72 individual models. Then there is a global correlation to the frequencies of all other markets. So there is not a single cycle that you can reverse-engineer from an array. It just does not work that way. We simply do cycles differently than most people in the cyclical analysis arena.
So why do they work? Perhaps that is just the key to the universe itself. The earth travels around the universe and reaches the same spot once every 25,800 years. We also are born, we live, and then we die – the cycle of life. Then at the core of everything lies the fractal design within nature. It is more than just a Mandelbrot Set. We have children who are copies our ourselves taking bits of both parent’s DNA. That is the process of cyclical reproduction by self-referral.
Then there is the Lorenz Stange Attractor which was the fascinating cyclical behavior of weather systems, which of course are ignored by the Global Warming people. In effect, they are no different from the people who executed others who dared to say the earth was round instead of flat.
President Trump and First Lady Melania stopped at Ramstein Air Base in Germany en-route back to Washington DC. The president took the opportunity to talk directly with key military generals and leaders aboard Air Force-One:
It’s a little funny to watch this. The chicken little pearl-clutchers at Fox Business: ‘orange-man-bad tariffs‘ -vs- former Walmart CEO Bill Simon on strong holiday retail sales, global growth and the U.S-China trade reset.
The Wall Street business-pundits are pre-programmed, at an institutional dna level, to jump into the “tariffs are bad” talking points. Mr. Simon aptly dispatches them with a dose of reality from the Wal-Mart/Main Street perspective. [It’s kinda funny]
In 2017 total holiday sales were reported as follows:
2017 CBS – […] They had a lot of company across the country. Total retail sales this holiday season added up to a record $598 billion dollars — up $33 billion from last year. (link)
In 2018 total holiday sales were reported as follows:
2018 WSJ and CBS – […] Overall, U.S. consumers spent over $850 billion this holiday season, according to Mastercard. The figures suggest a stock-market swoon and partial government shutdown haven’t curbed consumer confidence and spending. (link)
See the issue?..
In all 2017 financial media reports $598 billion was the holiday spending total. And in all of 2018 financial media reports $850 billion was the total holiday spending.
That’s a difference of $252 billion more spent in 2018. An increase of 42%.
Now, you might say it’s simply a difference in the media source. However, CBS is cited specifically to avoid this possible disparity.
Additionally, the exact same analyst is quoted in both years:
2017 – “”This is literally the best season since before the recession,” business owner Craig Johnson said. “Johnson’s company, Customer Growth Partners, analyzes all things retail. He credits low unemployment and a booming stock market for this humbug-free holiday season.
“The single biggest drive of retail sales is growth in real disposable income,” he said. “And when real income goes up, people have money in their pocket and they’re able to spend it.” (link to 2017 analysis)
-AND in 2018-
2018– ““Wall Street is running around like a chicken with its head cut off, while Mr. and Mrs. Main Street are happy with their jobs, enjoying their best wage increases in a decade,” said Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm. A recent drop in gas prices has helped last-minute spending, he said.” (link to 2018 analysis – and additional citation via identical CBS)
If $598 billion was spent in 2017; and $850 billion was spent in 2018; that means this years holiday shopping increase was truthfully, factually, and actually a jaw-dropping 42% !!
Now….
Why would the overall media, and specifically the Wall Street focused financial media, downplay results that reflected a stunning 42% increase in consumer spending?
Could the institutional bias be that overt?
Then again…. perhaps the underlying truth explains this:
Do you realize the scale of this?
According to a report in Bloomberg News the U.S. is sending a trade negotiation team to Beijing on January 7th, 2019. If accurate this would be the first face-to-face delegation since President Trump and Chairman Xi outlined the structure for strategic trade discussions during the G20 meeting in Buenos Aires.
(Via Bloomberg) A U.S. government delegation will travel to Beijing in the week of Jan. 7 to hold trade talks with Chinese officials, two people familiar with the matter said.
Deputy U.S. Trade Representative Jeffrey Gerrish will lead the Trump administration’s team, which will also include Treasury Under Secretary for International Affairs David Malpass, according to the people, who spoke on the condition of anonymity. Neither the USTR nor Treasury responded to requests for comment. (more)
When President Trump outlined the preliminary terms for negotiations between the U.S. and China, U.S Trade Representative Robert Lighthizer was assigned the lead position for the contacts. Abassador Lighthizer has been very firm in pointing out the 90-day window for discussions, prior to enhanced tariff action, was not going to change. The deadline is March 1st, 2019, for a principle agreement, or the next phase of tariffs is triggered.
THE DANCE – There are some signs Beijing is trying to bring an aggressive North Korea back into play as leverage toward China’s economic negotiation goals. President Trump will almost certainly instruct Secretary Mike Pompeo to engage and schedule a second meeting between Chairman Kim Jong-un and President Trump.
Trump’s move to keep North Korea’s Chairman Kim visible and negotiating is less about DPRK denuclearization and more specifically about keeping Chairman Xi from being able to leverage DPRK denuclearization as part of China’s trade leverage. This aspect to the U.S -vs China geopolitical confrontation can be described as the dance of the panda mask.
Donald J. Trump✔@realDonaldTrump
Christmas Eve briefing with my team working on North Korea – Progress being made. Looking forward to my next summit with Chairman Kim!
No other president would, could, or has, ever considered publicly taking on this dual economic and diplomatic challenge. Not only is President Trump taking on China, but he is simultaneously taking on every financial interest who previously acquiesced to China – because they saw no option.
Only, and I do mean O.N.L.Y President Trump has the cunning to take on China, Wall Street, the multinational banking system (IMF), the World Trade Organization, and every vested global politician…. while simultaneously taking on Beijing’s DPRK control ploys.
The vast majority of punditry and news discussion will focus on Trump and Xi as if they are direct adversaries. That adversarial perspective is not only misplaced, it is merely the tip of the iceberg. A limited perspective will entirely miss what is happening beneath the surface. That’s where the fight is. That’s where the really good stuff is happening.
The real challenge in dealing with or confronting China is what happens in the places we cannot see directly attached. Specifically because politicians suck at complex strategies that not entirely obvious to the consuming masses – we have never had a politician with the right skills, in the right position, to take on a cunning Eastern economic adversary.
We do now.
POTUS Trump’s life dealing with predatory financial adversaries, including the Chinese, has provided him with a very specific set of skills. Trump is keenly aware of the cunning nature behind the panda mask; and the results so far are excellent. It is also clear that Robert Lighthizer holds a solid understanding of this specific adversary.
Those who follow global politics and global economics well understand the significance and massive consequence in this U.S. -vs- China confrontation. This economic challenge is planetary in scale. This one is for all the marbles. There are trillions upon trillions at stake, and Donald Trump is confronting decades of planning by global financial interests.
President Donald Trump and First Lady Melania Trump deliver remarks to U.S. military during a surprise visit to Al Asad Air Base in Iraq.
During his remarks President Trump outlines his determination to remove U.S. military from Syria and to hold regional allies accountable to retain stability and security.
Additionally President Trump directly addresses the notion that any withdrawal from the region means a reconstituted terror threat that might strike the U.S: “if that was to happen, they would suffer consequences like never before.” “That’s not a threat, that’s going to be a fact.” … “If anything were to happen at all.”
Donald J. Trump✔@realDonaldTrump
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!
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