Worst Mistake

GUALFIN, ARGENTINA – By our calculation, it took just 76 days for President Trump to get on board with the Clinton-Bush-Obama agenda. Now there can be no doubt where he’s headed. He’s gone Full Empire. Not that it was unexpected. But the speed with which the president abandoned his supporters and went over to the Deep State is breathtaking.

    Once there was only a Trump fragrance called Empire… now he has gone full empire himself

 

Among the noise and hubbub of the election campaign, there was one message coming from the Trump team that was music to our ears. Middle East wars? He was against them, he said.

He claimed to have opposed the 2003 attack on Iraq. He said it was one of the “worst mistakes” the country ever made. As for further involvement, why waste American lives and American wealth on wars you can’t win?

“America First,” he said. This was a refreshing position. It put the Republican neo-cons and Establishment Republicans against him; many went over to Hillary rather than risk giving up their think tank grants and consulting fees.

 

Tweets by Bill Kristol, one of the best known pro-war neo-con think tank appendages and political pundits in the US. It is quite amazing that this man is actually considered a “conservative”. He is probably not in the least concerned that his views are widely rejected by American citizens, safe in the knowledge that they can be “brought around” every time with a sufficient dose of war propaganda (generally, this has always been true). However, mainstream media are fading away, reaching fewer and fewer people every year. Controlling the narrative is no longer as easy as it once was.

 

A 2013 poll showed 52% of Americans thought the U.S. should “mind its own business internationally.” But the elite gained power and money from foreign wars; they weren’t going to give them up. Non-entitlement spending in the swamp goes largely to cronies in the military-security industry.

 

Perfect Deep State War

But Donald Trump promised a “new foreign policy.” No more trying to be the world’s policeman. No more fighting other people’s battles… and making things worse. No more wasting American money and American lives on foolish, unwinnable wars.

Ending America’s pointless and unsettling romp in the desert would be a good first move. The bill for these misadventures is now said to be $7 trillion. As to Syria, Trump was typically direct. Don’t attack the country, he warned Barack Obama in a 2013 tweet, or “MANY VERY BAD THINGS WILL HAPPEN…”

 

The Donald couldn’t have been any clearer in 2013… but that was then, and this is now.

 

But then, last week the last great hope for the Trump administration blew up in Syria. Now the neo-cons are delighted. And the cronies. And the zombies, too.

Here’s the outlook: no real change to O’care. No cutbacks in entitlements. No attempt to balance the budget. No belt-tightening at the pudgy Pentagon (instead, it will get more money).

And now this: The wars in the Middle East will not only go on… they will accelerate. For now, the U.S. is not only fighting terrorists. It is also fighting the people who are fighting the terrorists.

It’s a perfect Deep State war: It is guaranteed neither to win nor to lose, but simply to go on indefinitely. This gives the insiders more and more of the nation’s wealth to piddle away in absurd wars in preposterous places.

Meanwhile, Congress adjourned. When it returns in two weeks, it will confront another crisis of its own making. Bloomberg reports:

 

Government funding expires on April 28, which will give Congress five days to unveil, debate, and pass an enormous spending bill… or trigger a government shutdown.

“What a mess,” said Paul Brace, a congressional expert at Rice University in Houston, offering his own pessimistic view of the unified Republican control of the House and Senate so far under President Donald Trump. “It was so much easier when all you had to do was oppose Obama.”[…]

House Republicans “have differences of opinion. And they aren’t just political differences. They are policy differences,” said Republican Senator Rob Portman of Ohio.

 

Old & New Wounds

And so our incipient Doom Index is still flashing a warning. It will be tough for Congress to come to terms with its budget. The debate will open old wounds and gouge new ones.

Already, the federal budget deficit is expected to average $1 trillion a year over the next 10 years. Mr. Trump will want to spend more. We need to spend more on infrastructure, on the military, and to revive the economy… he’ll argue.

Many House Republicans, especially the idealists in the Freedom Caucus, will find it difficult to go along. Some will notice, cynically, that the whole program – including the attack on Syria – is little different from what Hillary had offered.

 

Long-term projection of the public debt-to-GDP ratio by the Congressional Budget Office (CBO); note that the CBO could easily turn out to be too optimistic with regard to future economic growth and the inexorable rise in entitlement spending – click to enlarge.

 

Consumer prices are already rising, others will note. Besides, who wants to go back to his home district after having signed on to $30 trillion of U.S. debt?

Others, the activists, will want to back Trump. The Obama years have been disastrous, they will say. The typical household is little better off than it was at the bottom of the last recession. Half of Americans are living paycheck to paycheck. And there are 66 million working-age adults without jobs, they’ll report.

The feds must do something! Increase spending to stimulate the economy (and not coincidentally steer a few bucks to major campaign contributors and other important hacks).

 

Runaway Locomotive

The more financially alert among members of Congress will recognize that eight years of stimulus has done little to help the real economy. These realists will see a runaway locomotive headed to a dangerous curve.

They’ll want to know how the feds will finance huge new deficits just as the Fed tightens interest rates. But the shrewdest among them will call their brokers.

 

Two famous “1-800-GET-ME-OUT” moments on Wall Street (charts via John Hussman), a.k.a. “sudden repricing events”, or as Bob Bronson refers to them, “mass-correlated hyper-volatile illiquidity events” (MCHVIE). It is generally advisable to sell before these events take place, even if one risks missing a little more upside. The investor class as a whole cannot avoid taking these losses, as all outstanding stocks are held by someone at all times. There is no mysterious Wall Street aether in which unowned stocks are floating about. Only a small number of investors will be able to side-step such events by selling to future bag-holders in time – click to enlarge.

 

The highest stock prices since the dot-com crash are based on the belief that, somehow, Team Trump will push through a corporate tax cut, leaving businesses with more after-tax money.

“That’s not going to happen,” they will say to themselves. They will want to get out of the stock market before other investors catch on.

 

Charts by CBO, John Hussman

 

Chart and 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.

 

 
 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add 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:

  • Can Germany Be Made Great Again?
      When Germany Was Great! Ever since the start of the deliberately conceived “migrant crisis,” orchestrated by NWO elites, the news out of Germany has been, to say the least, horrific. Right before the eyes of the world, a country is being demographically destroyed through a coercive plan of mass migration.  The intended consequences of this – financial strain, widespread crime and property destruction, the breakdown of German culture – will continue to worsen if things are not...
  • Yanking the Bank of Japan’s Chain
      Mathematical Certainties Based on the simple reflection that arithmetic is more than just an abstraction, we offer a modest observation.  The social safety nets of industrialized economies, including the United States, have frayed at the edges.  Soon the safety net’s fabric will snap. This recognition is not an opinion.  Rather, it’s a matter of basic arithmetic.  The economy cannot sustain the government obligations that have been piled up upon it over the last 70...
  • Incrementum Advisory Board Meeting, Q3 2017
      Global Monetary Architecture The quarterly Incrementum Advisory Board meeting was held last week (the full transcript is available for download below). Our regulars Dr. Frank Shostak and Jim Rickards were unable to attend this time, but we were joined by special guest Luke Gromen of research house “Forest for the Trees” (FFTT; readers will find free samples of the FFTT newsletter at the site and in case you want to find the link again later, we have recently added it to our blog roll)....
  • Views From the Top of the Skyscraper Index
      Views From the Top of the Skyscraper Index On a warm Friday Los Angeles morning in spring of 2016, we found ourselves standing at the busy corner of Wilshire Boulevard and South Figueroa Street.  We were walking back to our office following a client wire brushing for events beyond our control.  But we had other thoughts on our mind.   Iron workers (the non-distraught variety) atop the 10 ton spire of the Wilshire Grand Center in Lost Angeles. This image is vaguely...
  • Bitcoin, Gold and Silver
      Precious Metals Supply and Demand Report That’s it. It’s the final straw. One of the alternative investing newsletters had a headline that screamed, “Bitcoin Is About to Soar, But You Must Act by August 1 to Get In". It was missing only the call to action “call 1-800-BIT-COIN now! That number again is 800 B.I.T..C.O.I.N.”   Bitcoin, daily. In terms of the gains recorded between the lows of 2009 and the recent highs (from less eight hundredths of a US cent per...
  • Prepare for Another Market Face Pounding
      “Better than Goldilocks” “Markets make opinions,” goes the old Wall Street adage.  Indeed, this sounds like a nifty thing to say.  But what does it really mean?   The bears discover Mrs. Locks in their bed and it seems they are less than happy. [PT]   Perhaps this means that after a long period of rising stocks prices otherwise intelligent people conceive of clever explanations for why the good times will carry on.  Moreover, if the market goes up for...
  • Seasonality: Will Patterns that Worked in the Past Also Work in the Future?
      Historians of the Future Every investor makes trading decisions based on what happened in the past – there is no other way. What really interests us is the future though. After all, what happens in the future ultimately determines investment success.   When in doubt, you can always try to reach the pasture...  In Human Action, Ludwig von Mises described stock market speculators as akin to “historians of the future”. This is without a doubt the most trenchant definition of...
  • Bitcoin Forked – Precious Metals Supply and Demand Report
      A Fork in the Cryptographic Road So bitcoin forked. You did not know this. Well, if you’re saving in gold perhaps not. If you’re betting in the crypto-coin casino, you knew it, bet on it, and now we assume are happily diving into your greater quantity of dollars after the fork.   Bitcoin, daily – adding the current price of BCH (the new type of Bitcoin all holders of BTC can claim at a 1:1 ratio), the gain since the “fork” amounts to roughly $1,000 at the time we...
  • What Went Wrong With the 21st Century?
      Fools and Rascals   And it’s time, time, time And it’s time, time, time It’s time, time, time that you love And it’s time, time, time… - Tom  Waits   Tom Waits rasps about time   POITOU, FRANCE – “So how much did you make last night?” “We made about $15,000,” came the reply from our eldest son, a keen cryptocurrency investor. “Bitcoin briefly pierced the $3,500 mark – an all-time high. The market cap of the...
  • Czar vs. Pope
      Vladimir the Great Sums Up Pope Francis the Fake Vladimir Putin has once again demonstrated why he is the most perceptive, farsighted, and for a politician, the most honest world leader to come around in quite a while.  If it had not been for his patient and wise statesmanship, the world may have already been embroiled in an all-encompassing global conflagration with the possibility of thermonuclear destruction.   Vladimir Putin is sizing up Pope Francis with his “good...
  • Bitcoin Has No Yield, but Gold Does – Precious Metals Supply and Demand Report
      Bitcoin and Credit Transactions Last week, we said:   It is commonly accepted to say the dollar is “printed”, but we can see from this line of thinking it is really borrowed. There is a real borrower on the other side of the transaction, and that borrower has powerful motivations to keep paying to service the debt. Bitcoin has no backing. Bitcoin is created out of thin air, the way people say of the dollar. The quantity of bitcoins created may be strictly limited by...
  • Is Historically Low Volatility About to Expand?
      Suspicion Asleep You have probably noticed it already: stock market volatility has recently all but disappeared. This raises an important question for every investor: Has the market established a permanent plateau of low volatility, or is the current period of low volatility just the calm before the storm?   All quiet on the VIX front... what can possibly happen? [PT] - click to enlarge.   When such questions regarding future market trends arise, it is often...

Support Acting Man

j9TJzzN

Austrian Theory and Investment

Own physical gold and silver outside a bank

Archive

350x200

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

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]

 

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com