Ganging up on the Donald

PARIS – Poor Donald Trump. Everybody’s against him.

Jeb Bush says he’s “unhinged”…

…Chris Christie says he has “no idea what [he’s] talking about”…

…John Kasich accuses him of “outrageous divisiveness”…

 

loveThe Donald – in reality, they love him…

 

…and Marco Rubio describes him as “offensive and outlandish.”

And those are just his fellow Republicans!

“Reprehensible… prejudiced…” adds Hillary Clinton.

Piling on, Martin O’Malley says Trump is a “fascist demagogue.”

Can a man with enemies like these really be bad? More below…

 

New Low for Oil

U.S. stocks slipped yesterday. No big deal. The press looked around for something to pin it on. All it could find was falling oil prices. The price of the black goo fell below $38 a barrel to its lowest level since the depths of the global financial crisis.

 

1-WTICWTI crude oil retests its late August low on slightly lower volume, waylaid by a warmer than expected autumn and OPEC’s inability to turn off its spigots. We have added a small Elliott Wave count of the most recent moves since the August low, and one question that suggests itself to us is: is there anyone left who is not bearish on crude? Even before the most recent wave of selling, the optimism index for crude had declined to its lowest level in more than 14 years – click to enlarge.

 

You’d think cheaper energy would be a good thing. Don’t company profits – outside of the oil patch – go up when the cost of fuel goes down? Don’t households have more money to spend? Shouldn’t other things be looking up when oil is looking down?

Oil is the biggest expense of the transportation industry. Lower prices should drop right to the bottom line as extra profits. But the problem is not the cost side; it’s the revenue side.

As we reported yesterday, rail and truck shipping in the U.S. is slowing – signaling a slumpy economy with weak demand. And corporate profits are on the way down, too… dragged down by the energy sector. The whole kit and caboodle seems to be funking up.

 

Under the Hood

Which is just what you’d expect – partly because central banks’ “stimulus” measures were a sham (about which we’ve written more than enough) – and partly because every expansion comes to an end after a few years.

The National Bureau of Economic Research studied the U.S. all the way back to 1854. It found that the typical economic expansion lasts 39 months. This one began in 2009. By our count, that makes more than 75 months without a breather. On that basis alone, you’d expect a little more caution on the part of investors.

But there is one supposed exception to this somber picture… a bright light coming from the shiny bumpers of the auto industry. Rail shipments are down for everything – except autos. And “strong auto sales” are said to be proof of a healthy consumer economy.

 

2-Car loansAn explosion in motor vehicle loans – click to enlarge.

 

Uh… that is, once again, if you don’t open the hood. The industry has been so corrupted by cheap credit that it is misleading even to talk about auto “sales.” The typical loan period has stretched to 67 months, as the industry reached for more marginal (read: sub-prime) buyers.

The proud new owner reports to his friends that he has “bought a new car.” But at a 5% interest rate, reports Bonner & Partners researcher Nick Rokke, that means the buyer only gets 1/77th of the car when he allegedly “buys” it.

 

3-subprime car loansRelative growth rates of sub-prime car loans vs. car loans to people with strong credit scores – click to enlarge.

 

Readers who are quick with numbers will notice that the length of the average sub-prime auto loan, the length of the current business expansion, and the length of time that the Fed has maintained its zero-interest-policy are all clustering around 70. Perhaps this is more than a coincidence.

But back to the big news…

 

Looney Leanings

Donald Trump brought the wrath, ire, and contempt of the mainstream political establishment down on his head yesterday. He called for a “total and complete shutdown on Muslims entering the United States.”

Most commentators quickly condemned him, pointing out that such a ban would be unconstitutional and completely against the principles on which the nation was founded.

 

Hair questionsAlien anchor hair discovered…

 

But in a spirit of pure mischief (a blustery billionaire hardly qualifies for our customary support for die-hards, lost causes, and underdogs), we rush to the defense of “The Donald.”

Yes, his proposal is reckless, stupid, unworkable, unfair, and un-American. But it might not be unpopular. Give the man credit. He’s running for president. To win, he needs the votes of people who are at least as block-headed as he is.

In that respect (perhaps the only respect) his latest proposal may not be a bad idea. Also, making preposterous and outrageous proposals hardly disqualifies you for the White House.

Some of our “best” presidents – at least, according to historians and the public – were those who did the looniest things… things that were completely at odds with the Constitution, the spirit of liberty, and their own policy goals.

President Lincoln told the crowd at Gettysburg that his war against the South was in line with the Declaration of Independence, which clearly asserted the right of a people to choose their own government.

The war would determine, he said, whether “that nation, or any nation so conceived and so dedicated, can long endure.” The answer was “no.” And he made sure of it.

 

ColDemands12wContemporary cartoon of Lincoln attack him over the human toll of the Union war effort. Columbia, wearing a liberty cap and a shirt made of an American flag, demands, “Mr. Lincoln, give me back my 500,000 sons!” At the right, Lincoln, unfazed, sits at a writing desk, his leg thrown over the chair back. A proclamation calling for “500 Thous. More Troops,” signed by him, lies at his feet – click to enlarge.

Image credit: Joseph E. Baker

 

President Wilson did the same thing for foreigners – invading more countries than any other president… while proclaiming the right to self-determination. Elections were fine, said Wilson, as long as they chose “good men.” If he didn’t like the men chosen… he sent in the troops.

By the standards set by Lincoln and Wilson, Donald Trump has the capacity to be one of our greatest leaders.

 

wilsonVote for Woodrow Wilson “who kept you out of war” (and didn’t saddle you with a Federal Reserve…)

Image credit: Punch

 

PS:

It doesn’t really matter who wins the race for the White House, because the Deep State already controls just about every aspect of American life. From health care, to education, to the food on our tables, to the never-ending war on terror, the Deep State is pulling the strings.

 

Charts by stockcharts, St. Louis Fed, WSJ

 

Image captions by PT

 

The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.

 

 
 

Emigrate While You Can... Learn More

 
 

 
 

Dear Readers!

It is that time of the year again – our semi-annual funding drive begins today. Give us a little hand in offsetting the costs of running this blog, as advertising revenue alone is insufficient. You can help us reach our modest funding goal by donating either via paypal or bitcoin. Those of you who have made a ton of money based on some of the things we have said in these pages (we actually made a few good calls lately!), please feel free to up your donations accordingly (we are sorry if you have followed one of our bad calls. This is of course your own fault). Other than that, we can only repeat that donations to this site are apt to secure many benefits. These range from sound sleep, to children including you in their songs, to the potential of obtaining privileges in the afterlife (the latter cannot be guaranteed, but it seems highly likely). As always, we are greatly honored by your readership and hope that our special mixture of entertainment and education is adding a little value to your life!

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • Gold Price Skyrockets in India after Currency Ban – Part III
      When Money Dies In part-I of the dispatch we talked about what happened during the first two days after Indian Prime Minister, Narendra Modi banned Rs 500 and Rs 1000 banknotes, comprising of 88% of the monetary value of cash in circulation. In part-II, we talked about the scenes, chaos, desperation, and massive loss of productive capacity that this ban had led to over the next few days.   Indian prime minister Narendra Modi – another finger-wagger, as can be seen in this...
  • Gold Price Skyrockets in India after Currency Ban – Part IV
      A Market Gripped by Fear The Indian Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes would no longer be legal tender. Linked are Part-I, Part-II and Part-III updates on the rapidly encroaching police state. The economic and social mess that Modi has created is unprecedented. It will go down in history as an epitome of naivety and arrogance due to Modi’s self-centered desire to increase tax-collection at any cost.   Indian jewelry...
  • A Note on Gold and India – What is Driving the Gold Price?
      Hidden Motives It is well-known that India's government wants to coerce its population into “modernizing” its financial behavior and abandoning its traditions. The recent ban on large-denomination banknotes was not only meant to fight corruption.   Obviously, this very bad Indian has way too much cash. Just look at him, he looks suspicious! Photo via thenewsminute.com   In fact, as our friend Jayant Bhandari has pointed out, fresh avenues for corruption ...
  • Gold Price Skyrockets in India after Currency Ban – Part V
      A Brief Recap India's Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes will no longer be legal tender. Linked are Part-I, Part-II, Part-III, and Part-IV, which provide updates on the rapidly encroaching police state Expect a continuation of new social engineering notifications, each sabotaging wealth-creation, confiscating people’s wealth, and tyrannizing those who refuse to be a part of the herd, in the process destroying the very backbone of the...
  • Attaining Self-Destruct Velocity
      Bad Monday Some Monday mornings are better than others.  Others are worse than some.  For one Amazon employee, this past Monday morning was particularly bad. No doubt, the poor fellow would have been better off he’d called in sick to work.  Such a simple decision would have saved him from extreme agony.  But, unfortunately, he showed up at Amazon’s Seattle headquarters and put on a public and painful display of madness.   Good-bye cruel world! On this our planet,...
  • India's Currency Debacle – An Interview with Jayant Bhandari
      A Major Crisis Last week Jayant Bhandari related the story of the overnight ban of certain banknotes in India under cover of “stamping out corruption” (see Gold Price Skyrockets In India after Currency Ban Part 1 and Part 2 for the details).   Banned 500 rupee banknotes   The problem is inter alia that the sudden ban of these banknotes has hit the Indian economy quite hard, given that 97% of all transactions in the country are cash-based. Not only that, it has...
  • Will the Swamp Swallow Trump?
      Permanently Skewed TRUMP HOTEL, New York – Trump’s rambling army – professionals, amateurs, camp followers, and profiteers – is marching south, down the I-95 corridor. There, on the banks of the Potomac, it will fight its next big battle.   Lieutenants in Trump's army: Bannon, Flynn & Sessions Photo credit: Drew Angerer / AFP   Here at the Diary, we do not like to get involved in politics. But this is a special time in the history of our planet – a...
  • All Aboard! Trump’s Express Train to the Future
      Free Money! BALTIMORE – Last week, the Dow punched up above 19,000 – a new all-time record. And on Monday, the Dow, the S&P 500, the Nasdaq, and the small-cap Russell 2000 each hit new all-time highs. The last time that happened was on the last day of December 1999.   Ironically, two events that were almost universally expected to trigger large stock market declines were followed by quite rapid and strong gains. Would the market have fallen if Hillary Clinton had won...
  • There Are Two Types of Credit — One of Them Leads to Booms and Busts
      Stumped by the Bust In the slump of a cycle, businesses that were thriving begin to experience difficulties or go under. They do so not because of firm-specific entrepreneurial errors but rather in tandem with whole sectors of the economy. People who were wealthy yesterday have become poor today. Factories that were busy yesterday are shut down today, and workers are out of jobs.   What has caused the bust? The modern-day economic orthodoxy continues to be unable to provide...
  • Gold Bull Market Remains Intact – Long Term Fundamentals Outweigh Short Term Market Gyrations
      A Strong First Half of the Year, Followed by Another Retreat In early 2016 gold had a big bull run. The precious metal rose close to 25% this year, pushed higher in a summer rally that peaked on July 10th. Gold experienced a bumpy ride over the remainder of the summer though, as investors became increasingly concerned about a potential rate hike by the Federal Reserve. Uncertainty returned to gold market and has intensified further since then.   Initially, gold rallied sharply...
  • Too Early for “Inflation Bets”?
      The Trump Trade After 35 years of waiting... so many false signals... so often deceived... so often disappointed... bond bears gathered on rooftops as though awaiting the Second Coming. Many times, investors have said to themselves, “This is it! This is the end of the Great Bull Market in Bonds!”   The long bond's long cycle – red rectangles indicate when the post 1980 bull market was held to be “over” or “over for sure” or “100% over”, etc.  We have...
  • Putting an End to the Regulatory Industry
      Gross Regulatory Overburden Corporate life in America these days is fraught with tedium.  First the MBAs imposed their silly six sigma processes and reduced workers to mere widgets. Then the regulators went through and squashed out any fun that remained. Gone are the days when shrewd eccentrics could get rich using techno-babble to hawk the Turbo Encabulator.  Alas, there are rules and regulations stymieing all creativity.  In fact, as a matter of law, such restrictions are shoved...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com