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.

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:

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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.”…

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]

Here’s a weird question.  I’ve been looking at this all day.  Something sketchy is afoot.  I waited specifically for CBS to report so that I could share an exact comparison.

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%.

A forty-two percent increase !!

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:

(LINK)

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.

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Christmas Eve briefing with my team working on North Korea – Progress being made. Looking forward to my next summit with Chairman Kim!

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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.”

…The Dow Jones Industrial Average rose 5%, or more than 1,000 points, and recorded the largest daily point gain in its history. Meanwhile, the S&P 500 climbed 4.9%…. (more)

(Via CNBC) Retail is having its best holiday shopping season in six years, according to early data tracking consumers’ purchases.

Sales in the U.S. from Nov. 1 through Christmas Eve were up 5.1 percent to more than $850 billion, according to Mastercard SpendingPulse, which monitors spending both in stores and online via all forms of payment. Mastercard also said online sales during that time frame were up 19.1 percent from a year ago, in line with earlier reports that showed robust growth in e-commerce this holiday season.

And this all comes amid the latest fluctuations in the stock market, worries on Wall Street about a potentially slowing economy and a partial government shutdown. Consumer confidence remains strong, translating into robust retail sales, said Steve Sadove, former CEO of Saks and currently advisor for Mastercard.  (read more)

Council of Economic Advisers Chairman Kevin Hassett appears on Fox Business news to discuss the impact of the Federal Reserve’s interest rate hikes on the Main Street economy and the state of the Wall Street stocks.

The key metric is to accept what’s happening around us.  Fed rate hikes are hurting Wall Street (investment class).  However, Fed activity is not yet impacting Main Street.  This is because the two economic engines (Wall St. -vs- Main St.) are so far apart.

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Part Two of this interview (and expanded review) is below:

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Three decades of monetary and administrative policy has favored Wall Street (globalism) over Main Street (nationalism).  Decades ago… Main Street and Wall Street used to be connected; stocks were evaluated on company performance; the companies were mostly American, and invested in the success of USA (middle class).

However, changes in monetary policy and political priorities, specifically to the benefit of Wall Street investment instruments (multinational global expansion), drove Wall Steet and Main Street ever further apart.

As a direct result when the Main Street economic engine becomes the focus of favorable policies (trade policy, energy policy, manufacturing policy, tax policy, deregulation etc.), the domestic US economy expands… bigly…

….AND now the Fed takes action in response to ever-expanding strength in our Main Street economy; but, that Fed action will take time to traverse the decades-wide gap… and the first impact will be negative to the original benefactor; the one closer to the actual monetary policy, that’s Wall Street.

I hate to keep harping the point, but this was predicted two years ago:

Understanding the distance between the real Main Street economic engine and the false Wall Street economic engine will help all of us to understand the scope of an upcoming economic lag; which, rather remarkably I would add, is a very interesting dynamic.

Think about these engines doing a turn about and beginning a rapid reverse. GDP can, and in my opinion, will, expand quickly. However, any interest rate hikes (monetary policy) intended to cool down that expansion -fearful of inflation- will take a long time to traverse the divide.  (more)

The Fed is using the opportunity of a strong national U.S. economy, and strong growth in U.S. wealth, to withdraw all of the underlying stimulus money (cheap money) that was needed to fill the gap during the global exfiltration of wealth under prior administration policies.

During the Bush, Clinton-Clinton, Bush-Bush, Obama-Obama years, Main Street middle-class Americans became more poor.   Wall Street investment class became more rich. Multinational corporate globalism drove the policy. The wealth gap is a direct result.

Over the past 30-years, increased income subsidies became a part of administration policy in an effort to fill a void from depressed wage growth. Welfare and food stamp distribution necessarily expanded.

President Trump’s economic policies are the exact opposite of globalism.  Policy to the benefit of working middle-class Americans (ie. America-First nationalism) is against the interests of the corporate multinationals.

Yes, it is unfair to President Donald Trump for the Federal Reserve to essentially buy back all the cheaply printed money used to prop up Wall Street’s schemes.  After all, it is a Fed action only possible because the U.S. economy is so strong.  President Trump’s success is essentially providing the Fed the opportunity to strengthen dollars and make them more valuable.  However, it is what it is…. though Trump’s annoyance is well understood.

Wall Street is getting hurt most; there is more pain ahead for those investment instruments on Wall Street that are dependent on globalism; but the negative Fed impacts to Main Street –as a whole– will not be felt in the aggregate until the two engines once again gain parity.

Again, as predicted: “Those who benefit from high-yield international investment instruments will see less wealth. Those who live on savings will see a benefit.  Those living day-to-day and week-to-week on their paychecks will see more income and wealth.”

2016 – […] Those global manufacturing economies will first respond to any increases in export costs (tariffs etc.), by driving their own productivity higher as an initial offset, in the same manner American workers went through in the past two decades.  The manufacturing enterprise and the financial sector remain focused on the pricing.

♦ Inflation on imported durable goods sold in America, while necessary, will ultimately be minimal during this initial period; and expand more significantly as time progresses and off-shored manufacturing finds less and less ways to be productive.   Over time, durable good prices will increase – but it will come much later.

♦ Inflation on domestic consumable goods ‘may‘ indeed rise at a faster pace. However, it can be expected that U.S. wage rates will respond faster, naturally faster, than any monetary policy because inflation on fast-turn consumable goods becomes re-coupled to the ability of wage rates to afford them.

The monetary policy impact lag, caused by the distance between federal fiscal action and the domestic Main Street economy, will now work in our favor.  That is, in favor of the middle-class.